Brussels, 14 December 2022 – On 13 December 2022, EIOPA published the results of its climate stress test of European Institutions for Occupational Retirement Provisions (IORPs) in which 187 IORPs from 18 countries participated representing 65% of IORPs’ assets in the EEA.
The results show that a severe climate change scenario will impact the assets of IORPs. From the perspective of being able to pay out pensions, PensionsEurope is glad to see that the results show that the impact on the funding ratios of DB schemes is limited with declines of a few percentage points.
At the end of December 2021, IORPs had on average around 6% of their equity and 10% of their corporate bond investments in carbon intensive industries such as electricity and various other energy production sectors, for which the scenario prescribed steep write-downs of between 20% and 38%. While PensionsEurope takes any vulnerabilities of IORPs seriously, it stresses that when investing for instance in electricity and various other energy producers, there are also numerous other aspects which should not be ignored.
The full press release is available below.