Specific Disclosures in the Pension Fund Sustainability Report

Abstract

Sustainable development refers to an environmentally sound, socially justified and corporate-oriented economic development that seeks to balance the social, corporate, and environmental principles of societal progress. The aim of sustainable development is to preserve and enhance the existing environment for the benefit of future generations. It necessitates care for the protection and restoration of environment; ensures biodiversity and the preservation of ecosystems; contributes to maintaining ecological balance in nature to enhancing the quality of life for future generations. The sustainable development management is focused on managing all activities in a way that safeguards the Earth and its resources. One of its core objectives is to secure the well-being of humanity.

It is of critical importance that the three components of sustainability – environmental, social, and corporate (governance) – are integrated into the enterprise’s strategy for future development, to foster a symbiosis among environmentally sound, socially acceptable, and transparent corporate governance of its business. The information concerning these three components of sustainability should be duly and reliably disclosed by reporting enterprises in a dedicated non-financial sustainability report. This report must disclose details the actions undertaken and commitments made in pursuit of sustainability policies, as well as the allocation of financial resources (expenditures and investments) to achieve the environmental, social, and corporate governance (ESG) objectives. Furthermore, reporting enterprises must disclose information regarding the impacts, risks, and opportunities associated with the achievement of these objectives.

Pension funds, as financial institutions, are also obliged to disclose, both in their financial statements and in their dedicated non-financial sustainability report, material, relevant, and reliable information about their activities in relation to the realization of the three sustainability components (ESG). Specifically, they must report on the environmental, social, and governance (corporate) policies they have adopted to support their sustainable development. These disclosures aim to meet the needs and requirements of stakeholders seeking informed, reasoned, and effective management decisions.

In connection with the preparation of the non-financial sustainability reports, there is a need to create and disclose reliable, accurate, sufficient, clear, and transparent financial information regarding the three components of sustainability. Pension funds must timely account for their expenses related to the implementation of the three components of sustainability, present them reliably in their Statements of profit and loss and other comprehensive income, and duly disclose them in their Sustainability Reports.

The environmental, social, and governance policies implemented by pension funds must ensure safety, continuity, and competitiveness of their operations, while being environmentally friendly and non-polluting, as well as not endangering human health and life. The effective integration of good environmental, social, and corporate governance practices into the management and business development strategy of pension funds is the paramount objective of their sustainable development to achieve high yields, strong competitiveness, environmental-friendly and nature-preserving activities, and socially significant contributions to society.