European ‘capital stewardship’ partnership proposed to boost long-term investment

A new plan seeks to mobilize private capital

An innovative proposal to form a pan-European ‘capital stewardship’ partnership is set to be discussed at a high-level meeting at the European Parliament next week.

The plan to create a so-called European Innovation Partnership (EIP) focusing on capital stewardship is being developed by civil society group European Partners for the Environment with the backing of Eurosif, the European Sustainable Investment Forum, and a group of MEPs called Globe EU.

The EIP would get member state ministers, senior European Union officials, industry CEOs and others together to work out how to mobilize private finance in support of a “resilient, low-carbon, resource-efficient” European economy.

EPE Executive Director Raymond Van Ermen presented the proposal at an event organised by Eurosif in Brussels this week. “What is needed is a mechanism to get the right people at the right table” to develop a plan of action, said Van Ermen.

“We at Eurosif think this has a lot of mileage,” said Eurosif’s Executive Director Francois Passant.

The EIP idea will a topic at a high-level event on October 2 that will feature Internal Markets Commissioner Michel Barnier, Environment Commissioner Janez Potočnik alongside responsible investment figures such as David Pitt-Watson of the UN Environment Programme Finance Initiative, Pieter van Stijn of PGGM, HSBC’s Nick Robins and ShareAction’s Catherine Howarth.The idea follows other EIPs that are being formed on the topics of smart cities, ageing population, water, sustainable agriculture and raw materials. EIPs, it’s claimed, “streamline, simplify and better coordinate existing instruments and initiatives” and complement them with new actions where necessary.
The raw materials EIP, for example, has a steering group comprising Potočnik, Innovation Commissioner Máire Geoghegan-Quinn, eight member state ministers and top executives from the likes of Nokia, Akzo Nobel and Michelin as well as research bodies and NGOs.

The water EIP, still in development, features an online collaboration platform for information exchange, matchmaking and teaming-up of public and private sector experts, organisations and resources.

A feature of EIPs is commitments known as covenants; in the capital stewardship EIP, these will come from retail banks and institutional investors, Van Ermen said.

He also suggested that Eurosif could not only have input in developing the EIP but also perhaps co-host its secretariat. He called on Eurosif affiliates to sign an “expression of interest” to help build momentum for the initiative.

Although Passant said the idea was “still very exploratory” at this stage, it was nonetheless an opportunity for Eurosif to “turn some of our policy thinking into action”.