EC paper ‘depicts shareholders as exclusively interested in short-term financial returns’, EFAMA argues

Written by Adam Cadle

09/02/2021

The European Fund and Asset Management Association (EFAMA) supports the European Commission’s initiative to ensure environmental and social interests are fully embedded into business strategies, however has said its consultation paper portrays a fundamental opposition between the interests of shareholders and those of stakeholders.

EFAMA said the EC paper depicts shareholders as exclusively interested in short-term financial returns.

“European Supervisory Authorities, as well as EFAMA, have not found sufficient evidence of investor-driven short-termism in European capital markets,” it said. “Any successful legislative measure will have to counter these assumptions and be based on a solid, evidence-based approach.”

Tanguy van de Werve, director general of EFAMA, added: “Investors value businesses that keep stakeholders’ interests in mind and adopt a long-term perspective with regards to sustainability and risk. Through a wide range of engagement activities, the asset management industry plays an increasingly important role in positively impacting investee companies on issues such as sustainability, governance, due diligence, executive remuneration and the overall business strategy.

“We firmly reject the assumption that shareholders are exclusively interested in short-term financial returns as it does not match the reality.  We ask that more tools be given to asset managers to further strengthen their stewardship role.”

EFAMA’s full response to the paper can be accessed here.

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