Consultation floats idea of common EU label for social investment funds

Discussion paper ahead of European Commission proposal by year-end

A European Commission discussion document has floated the idea of a common European Union branding for social investment funds.
“All of the measures and steps outlined in this consultapaper contribute towards the effective development of an EU brand or label for social investments funds,” the new consultation paper states.
It would need to be “clearly defended” by ensuring effective supervision and by makign sure other marketing material “does not dilute or undermine it” the paper, the Social Business Initiative: Promoting Social Investment Funds, says.
The consultation runs until September 14, which is to allow the Commission to make a proposal “before the end of this year”.
The paper is not seeking to explore the creation of a new European body; instead it focuses on facilitating social investments and on improving investment vehicles.It is separate from work the Commission is already doing on socially responsible investments which will be addressed in a forthcoming communication on corporate social responsibility.
The 17-page paper weighs the pros and cons of the UCITS framework as a conduit for funding to social businesses and asks whether a “new bespoke social investment fund framework” might be more effective.
The “possible contours” of a new social investment funds framework would need to encompass issues such as liquidity, risk diversification, types of assets and strategies, asset valuation, transparency and reporting and fund manager remuneration.
The EU has found that a “lack of clarity” in the terminology in social investments marketing undermines investor confidence.
An initial step could be, the paper suggests, to oblige all investment funds to disclose information about their investments into social businesses in a standardised and accessible way.