Eurosif response: Review of the Shareholder Rights Directive (SRD II)

Eurosif has submitted its response to the European Commission’s consultation on the review of the SRD II.

The review of SRD II represents a critical opportunity to ensure that investors can exercise their stewardship role, including in supporting the transition to a more sustainable, resilient and competitive European economy. While the current framework has improved transparency, significant legal, operational and cross‑border barriers continue to limit meaningful shareholder participation and engagement.

Eurosif’s key recommendations include:

• Establishing an EU‑wide stewardship code to harmonise expectations and strengthen engagement practices across the investment chain, while remaining voluntary and principles‑based.
• Defining what constitutes a ‘credible’ engagement policy, particularly for sustainability‑related engagement, and ensuring consistency between the SRD framework and the Sustainable Finance Disclosure Regulation (SFDR).
• Clarifying that collective engagement, including on sustainability matters, does not in itself constitute “acting in concert”, to remove a major legal barrier to collaborative stewardship.
• Introducing a harmonised EU‑level definition of ‘shareholder’, focused on the end investor, to improve legal certainty, cross‑border engagement and information flows.
• Improving the transmission of information and communication across the investment chain, through greater standardisation, digitalisation and transparency, to ensure shareholders can engage effectively, exercise voting rights and receive reliable confirmation that votes have been properly cast and recorded.
• Strengthening shareholder rights at general meetings, including by lowering or removing disproportionate ownership thresholds to table agenda items and resolutions, and by promoting hybrid AGMs as the default format.
• Making shareholder votes on directors’ remuneration binding across all Member States, and strengthening transparency on how ESG criteria are integrated into variable pay.
• Granting shareholders an EU‑wide right to vote on “say on climate, nature or sustainability”, to put sustainability decision‑making on an equal footing with financial matters.

 

Read our consultation response here.

Read our press release here.