Luxembourg’s €19bn pension fund in carbon footprint disclosure case with Greenpeace

Greenpeace Luxembourg claims “partial win”

(Updated with a response from the Luxembourg government.)

Legal efforts brought by Greenpeace to force Luxembourg’s €19bn pension fund to disclose the carbon footprint of its portfolio have fallen foul of a loophole. 

Earlier this year, Greenpeace Luxembourg initiated legal proceedings against Minister for Social Security Romain Schneider who supervises Luxembourg’s state pension fund Fonds de compensation (FDC). 

It followed unanswered letters from Greenpeace Luxembourg to Minister Schneider on information on the climate-related financial risks the fund is exposed to. 

Greenpeace Luxembourg took Schneider to Luxembourg’s Administrative Court under the EU’s “Law on Access to Environmental Information” legislation.

It described the judgement this week as a “partial win”. 

"It’s simply unbelievable that there is a pension fund with a board of directors which effectively can decide whatever they want."

Speaking to RI about the case, Myrna Koster, Legal Advisor at Greenpeace Luxembourg, said: “The judge said the case is admissible. So we went through the right way to access the information. 

“But under the law they [the Minister’s office] have no obligation to hold the information we requested. They only have to communicate information they have.”

As the information on the fund’s exposure is ultimately held by the FDC, not its government supervisor, Schneider is under no obligation to provide it. 

The judge also ruled that Schneider did not respect his legal obligation by not responding to Greenpeace’s Luxembourg letters. 

Martina Holbach, a campaigner at Greenpeace Luxembourg said the next step for the campaign group would be to look further into the obligations of the FDC’s directors. 

“The FDC’s board of directors have representatives from government, from trade unions and from industry. The question is what kind of role do these government representatives play, because they are voting on investment policy. 

“It’s simply unbelievable that there is a pension fund with a board of directors which effectively can decide whatever they want. And the minister just has a supervising task but cannot proactively tell the board of directors how to and where to invest. 

“This is certainly a political question but it is also maybe a legal question to investigate further.”

Jane Wilkinson, an ESG consultant based in Luxembourg and former Head of Sustainable Finance at the Luxembourg Stock Exchange and member of the European Commission’s Technical Expert Group (TEG), said: “The FDC is facing the same pressure that pension schemes around Europe are on climate change.”

She said in recent years the fund had a number of ESG and sustainable-related mandates.

But she noted that the board of directors was a diverse group of stakeholders; this added to the complexity of embedding ESG. 

Following lobbying from Greenpeace, the FDC published a revised investment strategy to include the provision of sustainable approaches in investment mandates. But this does not apply to passive mandates.

FDC has had an exclusion list since 2011 including Walmart over labour rights internationally, Volkswagen over the 2015 emissions scandal, Danske Bank over money laundering and Motorola Solutions over human rights violation in occupied territories in Palestine. 

The FDC said it would not comment on the judgement, and noted the legal action was against the Minister of Social Security and not against the FDC. 

The government response, added after this story was filed:

In a statement, the Luxembourg government said the plea by Greenpeace was admissible, from a legal point of view, but not justified at the end. "We do share the view of the Court regarding this last part," it said. 

It added: "Over the last years, many efforts have been made by the FDC management board together with our ministry to develop a sustainable and socially responsible investment strategy. Some of the measures taken are: implementation of an exclusion list, implementation of the obligation of an ESG-Strategy for new tenders, creation of a “green bonds” compartment and one for “sustainable impact” which is more specifically aligned with the UN Agenda 2030 goals etc. You will find more information on the FDC’s web site.