European fund body wants EU to encourage asset owner transparency on RI

The European investment management industry body EFAMA has called on the European authorities to encourage institutional asset owners to be transparent about their responsible investment (RI) practices.

EFAMA, the umbrella body for 27 national member associations, represents some €15trn in total. It wants the European Union hierarchy to “encourage institutional asset owners (particularly public pension funds and other public institutional investors) to be transparent about whether they adopt RI practices or not”.
It would also like it to support self-regulatory initiatives on transparency of RI and recognise RI as an incentive that can help encourage corporate responsibility of investee companies and sustainable development.
And the EU should also endorse RI in the management of EU state-owned or controlled funds and investment schemes.

In addition, the Brussels-based group would like more support for “better and more standardised” disclosure of ESG information by investee companies to“facilitate the processes for investment managers investing assets on behalf of clients wanting to invest in RI products”.

“It is EFAMA’s view that RI cannot be captured by a single regime, but a variety of approaches need to be allowed for,” the body, headed by Director General Peter De Proft, says in a new report.

EFAMA supports transparency about RI practices for funds marketed as responsible – though for those not promoted in this way “no additional disclosure” is necessary.
It said: “In EFAMA’s view transparency in RI reporting to investors should take place both in the pre- and post-investment phases only for those investment products that are promoted as RI products.”
EFAMA issued self-regulatory European wide industry standards on RI in February 2012.

The comments come in an updated position paper built on work by EFAMA’s working group on RI that was formed in 2010.