Court orders Germany's largest public sector pension fund to disclose investments, reveal climate compliance
Clean Energy Wire
Germany's largest occupational pension fund for public sector employees will have to disclose how it invests contributions from more than five million insured civil servants, including information on climate and sustainability criteria under certain conditions. The Pension Institution of the Federal and State Governments (VBL) will no longer be able to deny requests made under the Freedom of Information Act for details on how it manages the funds entrusted to it, according to a court ruling in a lawsuit filed by the sustainable finance NGO Finanzwende and transparency and research portal FragDenStaat. VBL can appeal the ruling.
While the pension fund has a set of public investment criteria, it has so far been impossible to verify whether the company complies with its own guidelines. VBL has faced criticism in the past for investments in the fossil fuel industry. "We continue to demand that VBL invests the funds entrusted to it in accordance with German climate targets," said Finanzwende expert Magdalena Senn.
The pension fund, which has an investment capital of around 60 billion euros, will now have to grant access to individual holdings in its portfolio and specify respective asset classes, issuers, country and market value, Finanzwende wrote in a press release.
"For years, the VBL has hidden behind flimsy excuses to avoid its transparency obligations," said FragDenStaat plaintiff Arne Semsrott. "Now, the five million insured persons can finally find out how the VBL invests their money – and what it has concealed so far." Sweeping rejections of inquiries on the investments’ sustainability aspects would no longer be possible, Semsrott added.
"The VBL is only obliged to provide information insofar as there are no trade or business secrets," the pension fund wrote in response to the ruling. "To date, the VBL has complied with all requirements imposed by law on pension funds and similar occupational pension schemes in Germany."
Germany's government has long worked to leverage the sustainable finance sector, although efforts have waned recently. Integrating finance into climate and energy policy has become a central challenge for governments around the world, as emissions reduction plans need proper funding, while investments that can undermine climate goals have to be cut back.
