The Italian pension fund for executives of commercial, haulage and transport companies, Fondo di Previdenza Mario Negri, is steering clear from considering the main effects of sustainable investing, as European Union rules on the matter are still unclear.
The regulatory framework on the transparency of sustainable investments proposed at EU level is “not yet definitive”, the scheme said in an investment policy document.
Fondo Mario Negri has therefore “deemed appropriate a prudent approach” on sustainable investing to avoid incurring possible risks of sanctions, in addition to reputational and operational risks, it added.
The pension fund has also decided not to list its sub-funds as article 8 or 9 of the Sustainable Financial Disclosure Regulation (SFDR).
The scheme has identified critical aspects of the EU rules, particularly relating to the transparency of sustainable investments, because invested companies are not yet required to prepare corporate information on sustainability, consistent with the principles of the SFDR, it added.
The Corporate Sustainability Reporting Directive (CSRD), which reforms corporate sustainability reporting by aligning it with the SFDR and the EU Taxonomy, will come into force progressively between 2024 and 2026, depending on company size.
Before that date, the information gap can only be filled with data provided by market operators, which in practice can differ and carry with them a “significant increase in costs”, the fund stated.
Fondo Mario Negri continues to integrate ESG criteria in its investment process, and uses a platform run by software company Manaos, a subsidiary of BNP Paribas, which is also the scheme’s custodian, and Clarity AI, to assess the ESG profile of its mandates.
Meanwhile, the fund’s board of directors is considering further diversifying its alternative investments, mainly in private equity, private debt, and infrastructure, on top of real estate, the only alternative asset class in its portfolio so far, it said.
Assets amounting to €4.05bn are invested through four sub-funds investing in investment grade, high yield, and convertible bonds, equities, forex and real estate, according to the fund’s 2023 annual report.
The sub-fund ‘Conti Individuali’ returned 6.32% last year, the ‘Bilanciato Medio Termine’ 9.99%, the ‘Bilanciato Lungo Termine’ 9.98%, and the ‘Garantito TFR’ 1.54 %.
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