Chile's retirement plans told to report on ESG risks

Chile’s retirement plans must report on how they incorporate ESG risks into the investment process under new rules from the Superintendencia de Pensiones, effective next year.

The regulator has told Chile’s retirement plans, known as AFPs, and the Administradora del Fondo de Cesantía, which administers unemployment funds in the country, that they must also provide an annual report detailing how ESG risks are being considered in investment policies.

Plan executives must also incorporate metrics to measure the impact of climate change on their portfolios.

The changes take effect May 3, 2021.

Separately, Chile’s senate passed on Thursday a government-backed bill that will allow participants to make a second withdrawal from their retirement plans.

On Sunday, Chilean President Sebastian Pinera said he would appeal to the country’s Constitutional Court to overturn the plans to allow participants to withdraw another 10% of their retirement savings. In July, participants in Chile were permitted to withdraw 10% of their savings to help fight the impacts of the coronavirus.

Bloomberg contributed to this story.

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