Governance

€65trn investor coalition mobilized in favour of EU non-financial reporting rules

Powerful message from investor groups amid business resistance

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A massive group of investor bodies representing more than 700 institutional investors with more than €65trn in combined assets have put their weight behind proposed European legislation on non-financial reporting.

Backing the statement, coordinated by European social investment forum Eurosif, is a ‘who’s who’ of global responsible investment bodies, such as the CDP (Carbon Disclosure Project) and International Corporate Governance Network (see full list below).

They say they “strongly support” plans released in April by the European Commission, the European Union’s executive arm, to oblige large European companies to report material non-financial information and diversity policy in their annual reports.

The signatories urge both the European Parliament and the heads-of-state-level Council to adopt the legislation “without weakening the provisions of the text”.

It comes as the main European business lobby, the 41-member BusinessEurope, as RI has reported, says it has “fundamental concerns” with the proposals.

Although the groups admit some aspects of the proposals could be strengthened, they argue there’s mounting evidence of links between how well a company manages environmental and social issues and its financial performance and cost of capital.So the planned rules are “a significant step forward for European and international investors who seek timely, material, comparable and forward-looking information on non-financial risks and opportunities”.

“Failure to adopt the legislation will make such decisions more difficult and costly for investors, and will increase the risks of harming European companies’ international competitiveness,” they say.

Signatories to investor statement:

  • Eurosif (European Sustainable Investment Forum)
  • Eumedion (Dutch corporate governance forum)
  • CDP (Carbon Disclosure Project)
  • CDSB (Climate Disclosure Standards Board)
  • EFFAS (European Federation of Financial Analysts Societies)
  • UNEP-FI (UN Environment Programme Finance Initiative)
  • ICGN (International Corporate Governance Network)
  • IIGCC (Institutional Investors Group on Climate Change)