Eurosif’s Commits Faux Pas

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    Stockholm (NordSIP) – On September 1, just a few days after welcoming a new Managing Director, Victor van Hoorn, at the helm, Eurosif stirred the European sustainable investment community by publishing a response to the consultation on ESG disclosures (SFDR) which heavily criticises the proposal of the European Supervisory Authorities (ESAs).

    Victor Van Hoorn, Executive Director, Eurosif

    One of Eurosif’s primary aims is to “acts as the representative body of the pan-European SRI community to the EU Institutions (European Commission and Parliament) as well as to other relevant supra-national organisations.” As part of that activity, the organisation prioritises Investor Transparency on ESG Practices.

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    “Eurosif believes that EU policy-makers should foster the development of SRI among institutional investors, in particular in mandating disclosure with regards to what extent (if at all) extra-financial (“ESG”) considerations are taken into account in the selection, retention and realisation of their investments; and disclose their policy in relation to the exercise of the voting rights attached to their investments,” Eurosif stats on its website.

    Meanwhile, in response to the latest proposal by the ESAs to increase the level of ESG disclosures in mandatory reporting to investors, Eurosif uses a surprisingly critical tone. “While we agree with the overall direction, we believe that the proposal by the ESAs regarding the mandatory 32 indicators to measure principle adverse impacts of the investments on sustainability factors, and particularly quantitative indicators, is too ambitious in terms of timeline. […] we believe that this data provides little context and too much information to investors…” the response states.

    “We have strong reservations concerning the approach proposed,” the response continues later. While opinions may diverge about the assessment of the various points made in absolute terms, the tone of the text stands out against a backdrop of other responses, such as the one written by the European Fund and Asset Management Association (EFAMA). For an organisation whose aim is to defend the interested of the asset managers, and not push sustainability as its first goal, the tone is simply more pragmatic and the critique less harsh.

    In an environment where the level of urgency to integrate sustainability more comprehensively in asset management has sharply increased, it is surprising to see an organisation like Eurosif push on the brakes so visibly. Are the regulators really asking too much or are the forerunners simply running out of breath?

    Picture credits: @andreyyalansky19 via Twenty20 / Eurosif

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.
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