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Eurosif Positions

Eurosif Positions


Eurosif response to a Public Consultation on Best Practice Principles for Governance Research Providers.

Access the letter  here


Eurosif has been a longstanding advocate of non-financial disclosure and reporting. In its response to the European Commission consultation on non-financial reporting in January 2011, Eurosif has been already supportive of the concept of integrated reporting.Overall, Eurosif believes that the proposed framework offers a strong basis for a combined approach to corporate reporting as one of the levers to embed sustainability in corporate strategy & management practices.

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Eurosif and ACCA conducted a survey of investors, analysts and other stakeholders to gather the views and opinions of the investment community on their use of ESG information and the proposed reporting regime.

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Eurosif welcomes the Consultation on the Green Paper on the long-term financing of the European economy.

Eurosif acknowledges that some assets are more likely than others to be managed for the long-term, due to certain characteristics such as liquidity. Long-term investors will manage assets for the long term. Long-term investments may be acquired by all investors, short or long term, but are (or should be) a proportionally greater part of a long-term investor’s portfolio.

In order for the European economy to benefit from more long-term productive capital, Eurosif supports the creation of specific legal frameworks to channel more investments into these assets, as this may make them more attractive to investors, especially if combined with incentives such as tax-breaks. However, it is imperative to avoid signalling to the market that assets not covered by such legislation are implicitly short term and the creation of such instruments must not overshadow the need to incentivise the broader capital markets to behave in a more long-term manner.

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Eurosif strongly supports European Commission legislative proposal COM(2013)207, both in terms of disclosure of non-financial information and of diversity policy.

The proposal serves as a major advancement for Europe and for the community of investors incorporating non-financial (Environmental, Social and Governance) matters in their investment decisions by making more relevant information available from a larger number of companies.

While the text can be improved in certain areas, such as on disclosure of key performance indicators, Eurosif considers the proposal by the Commission to be an appropriate baseline for improved ESG transparency and reporting to investors and other stakeholders, while avoiding imposing overtly costly requirements on companies, especially small and medium size companies.

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Eurosif has increasingly brought attention to the need for retail investment disclosure on environmental, social and governance (ESG) issues in the investment process, as a natural complement to extra-financial disclosure by companies. In our response to the PRIPs consultation in February 2011, Eurosif strongly supports the development of KID, a pre-contractual document that includes the critical information needed for retail investment decision making.

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The response has been developed as a part of Eurosif’s aims to develop sustainability through European financial markets. Eurosif  focuses on fostering a culture of long--term investment in Europe and is supportive of the renewed attention on long--term investing as a mechanism for generating sustainable growth in Europe.

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Eurosif welcomes the work of the European Securities and Markets Authority (ESMA) in highlighting the need for transparency and clarity around the share voting process and asset owners’ and managers’ use of third-party services such as proxy advisors.


This response has been developed as a part of Eurosif’s aims to encourage disclosure, transparency and responsible ownership, and to promote the integration of environmental, social and governance issues into financial services. It does not necessarily reflect the views of all its Members and Member Affiliates.

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On April 25, Eurosif submitted its Response to the EC Consultation on Gender Imbalance in EU Corporate Boards. In its Response, Eurosif reinforces its position on the topic, namely:

  • Eurosif’s position is that gender imbalance should be addressed first through a Recommendation addressed at establishing national mechanisms with minimum recommended levels of gender representation on boards (and management). 
  • This should be coupled with disclosure requirements and a ‘comply-or-explain’ approach as long as a framework is provided to ensure a sufficient quality of explanations. Additional EU legislation is appropriate if this proves ineffective.


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December 8, 2011 Response to EC Communication on CSR
Eurosif is generally positive to the views and initiatives in the Communication and
supports the idea that well-designed and implemented CSR practices can enhance
long-term competitiveness for European companies. 

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November 25, 2011 Response to the European Securities and Markets Authority’s
Consultation on Call for Evidence on Empty Voting

Eurosif welcomes the initiative of ESMA to establish the extent and severity
of empty voting practices in Europe.

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September 14, 2011 Response to the EC Consultation on the Social Business
Initiative: Promoting Social Investment Funds

Eurosif strongly supports access to social investment opportunities for all
investors, including retail investors, as a means of advancing sustainable
development through financial markets. Eurosif believes that a specific EU
framework is needed for social investment funds.

For more information please read here.

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On July 22, Eurosif submitted its response to the Green Paper on Corporate Governance in Listed Companies. In its response, Eurosif makes a series of recommendations on board responsibilities, shareholders' engagement and the comply-or-explain approach.

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On February 28, Eurosif submitted its response to the Single Market Act Consultation. In its Response, Eurosif makes a series of recommendations on corporate governance, pensions, retail  investment, SME access to finance and energy efficiency.

Download Eurosif Response (PDF).

Read more about the Single Market Act: http://ec.europa.eu/internal_market/smact/index_en.htm

On February 18, Eurosif submitted its response to the EC Consultation on legislative steps on Packaged Retail Financial Products (PRIPs).

Summary:

  • Eurosif strongly supports the development of a pre-contract document that includes the critical information needed for retail investment decision making (“Key Investor Information Document” - KIID);
  • Eurosif agrees that the model of the investor document created for the UCITS could serve as a strong basis for the creation of a PRIP KIID;
  • Eurosif recommends that the Commission explores how the KIID could contain additional information pertaining to environmental, social and governance (ESG) aspects in addition to the elements proposed by the Commission in the consultation document;
  • Labelling certain retail investment products as “green” or “ethical” must be done only after clear criteria, processes and definitions are set.

Download Eurosif Response to the PRIPs Consultation (PDF).

More information about the PRIPs, here.

On January 28, 2011, Eurosif submitted its response to the EC Consultation on the disclosure of non-financial information by companies.

Summary: In the response, Eurosif reinforces its position on the following issues:

  • Large listed and non-listed companies should be required to disclose non-financial information in their annual (management) reports; additionally, Eurosif recommends the adoption of ESG reporting recommendation guidelines for small and medium enterprises;
  • Mandatory ESG reporting by companies should be based both on principles and key performance indicators (general for all economic sectors and sector-specific);
  • The main scope of the legislation review should be the EU Accounts Modernisation Directive which currently favours only a “comply or explain” approach on ESG disclosure;
  • Investors should be mandated to disclose how they use non-financial information published by companies in their investment decisions;
  • The European Commission should work towards coordinating the existing initiatives in the area of ESG reporting and come up with a common European framework.

Download Eurosif's Response (pdf).

More information about the consultation process: http://ec.europa.eu/internal_market/consultations/2010/non-financial_reporting_en.htm

Summary: Eurosif supported the joint Response lead by Eumdion and the Association of British Insurers as part of the Consultation launched by the European Commission to improve the Securities Law Directive. The Response was submitted on January 1, 2011.

  • The Response supports the EC's approach to improve the functionning of the voting chain, by requiring account providers to facilitate the processing and exercise of securities rights, including voting.
  • In addition, the Response makes a a series of recommendations and solutions aiming to improve cross-border voting in Europe.

Download the Response here.

More information on the Securities Law Directive consultation can be found at the following link: http://ec.europa.eu/internal_market/consultations/2010/securities_en.htm.

Summary: Eurosif submitted its Response to the Public Consultation opened by the European Commission aiming to ensure adequate, safe and sustainable European pension systems. In its Response, Eurosif made a series of recommendations on the following topics:

  • The possible introduction of a European-wide Code of Practice for Pension Funds in which these would disclose how they engage with ESG issues (explore the good case practice of the UK Stewardship Code);
  • The introduction of mandatory Environmental, Social and Governance (ESG) considerations in Pension Fund Statements of Investment Principles;
  • The need to review the IORP Directive (Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision) on the following aspects set out in the Directive: investment rules, custodianship and cross-border activity;
  • The importance of Pension Fund transparency in increasing pension engagement rates of European workers (particularly in the context of the general trend towards Defined Contribution Pension schemes).

Download the Response here.

More information about the Consultation process can be found at the following link: http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=839&furtherNews=yes

Eurosif submitted its Response to the Public Consultation process opened by the EC's Internal Market and Services DG, making a series of recommendations on the following topics:

  • Board of Directors' roles and responsibilities (including on ESG risk management and control)
  • Transparency and the duties of third-parties along the ownership chain
  • Shareholder engagement in corporate governance issues
  • Linking remuneration to environmental, social and governance (ESG) performance

Download the Response.

As part of its ongoing lobbying efforts, Eurosif supported a letter sent to the Internal Markets and Services DG Commissioner Michel Barnier on August 23, by a group of pan-European investors led by Robeco and the UK's Association of British Insurers.

The letter is part of ongoing negotiations on the modification of the Securities Law Directive and makes recommendations on the following issues:

  • Increasing the transparency along the investment chain.
  • The duties of securities intermediaries.
  • Exercising voting rights by intermediaries on behalf of the shareholders.
  • The issue of cross-border voting.
  • The entities that should bear the costs along the investment chain.

Download the letter here.

Summary: Eurosif submitted to the European Commission's Internal Markets and Services DG its Response to the public consultation on the Modernisation of the Directive 2004/109/EC (transparency requirements for listed companies).

In its Response, Eurosif makes the following recommendations, among others:

  • The disclosure of Environmental, Social and Governance (ESG) data by all listed companies should be mandatory and should be a provision in the Transparency Directive.
  • The Transparency Directive should encourage the disclosure by investors on how they integrate environmental, social and governance issues in their investment policies.

Download the Response.

More information about the Transparency Directive: http://ec.europa.eu/internal_market/securities/transparency/index_en.htm

Summary: Eurosif submitted a joint Response to the European Commission aiming to improve the outcome from a series of workshops held from September 2009 to February 2010 by the EC to address environmental, social and governance (ESG) disclosure. The Response was jointly submitted by the following organisations: The European Federation of Financial Analysts Societies (EFFAS), Eurosif, European Laboratory, The Prince's Accounting for Sustainability Project, Railpen Investments and World Intellectual Capital/Assets Initiative.

The Response highlights the following:

  • Favours a combined approach to corporate reporting as one of the levers to embed sustainability in corporate strategy & management practices;
  • Supports a mandatory regulatory approach to ESG disclosure and reporting at the European level, as long as it provides companies with some latitude of choice in terms of content;
  • Considers that there is no appropriate ESG disclosure and reporting framework presently fully meeting the needs of capital markets actors (namely companies and investors), while non-financial disclosure and reporting frameworks currently in progress are promoting the idea of combined reporting;
  • Acknowledges the fact that the time has come to unite the efforts of the scattered and international European initiatives on ESG disclosure & reporting, and to support the efforts of international connected reporting initiatives such as the International Connected Reporting Committee.

Download the Response.

More information about the topic:  http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/reporting-disclosure/swedish-presidency/index_en.htm

Eurosif recommends that there is mandatory disclosure of ESG data by large listed entities. As this area has already attracted significant interest from various stakeholders, Eurosif suggests exploring a number of existing initiatives (Global Reporting Initiative, the Carbon Disclosure Project, recent guidelines by the International Corporate Governance Network (ICGN), and the current work of the Climate Disclosure Standards Board, for instance) and use them to amend existing regulation.

For more details, please download the pdf

In this position paper, Eurosif recommends that the European Commission adopt three proposals to increase transparency from various segments in the financial chain that would foster a longer-term, more sustainable economy within the EU:

Transparency from Companies: 

  • European institutions should mandate disclosure of ESG data by publicly traded, large corporations. Such reporting would be principles-based and use a limited number of standardised Key Performance Indicators (KPIs), some of them being sector-specific.

Transparency from Institutional Investors:

  • European institutions should introduce a mandatory Statement of Investment Principles (“SIP”) for Investment Funds in which trustees would state the extent (if at all) to which ESG considerations are taken into account in the selection, retention and realisation of investments; and their policy in relation to the exercise of the rights (including voting rights) attached to investments.

Shareholders Rights and Transparency:

  • The Commission should adopt measures to allow shareholders to keep control of their rights at all times, improve accountability of service providers within the proxy voting chain, and allow issuers to know who their shareholders are at any moment so that they can communicate to them efficiently.

Download pdf for more details.