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Eumedion advocates far-reaching transparency on tax payments by multinationals

Eumedion advocates far-reaching transparency on tax payments by multinationalsNews · 15-04-2021

Eumedion believes that every multinational should not only disclose their tax contributions for all EU Member States, but for all countries they operate in. In addition, this country-by-country tax information must be audited by the external auditor. This follows from the statement Eumedion published today with respect to the proposed European directive on country-by-country tax reporting.


Eumedion has always supported the European Commission’s proposal to introduce an obligation for multinationals to publicly report where taxes are paid (‘country-by-country tax reporting’). Promoting greater disclosure of taxes paid per jurisdiction increases overall transparency and allows for a more detailed analysis by investors and better engagement on tax-related topics. In the light of the current negotiations between the EU institutions, Eumedion has published a statement with some comments on the positions of the European Parliament and the European Council. In the statement Eumedion writes that it supports the position of the European Parliament that the country-by-country information should not only be provided for each EU Member State but also for each tax jurisdiction outside the European Union. Furthermore, Eumedion states that it believes that the directive should be strengthened by requiring that the information in the country-by-country report should be audited by the external auditor. And by requiring that the aforementioned information shall be published as an annex to the annual financial statements.

Eumedion in favour of targeted European harmonisation of insolvency law

Eumedion in favour of targeted European harmonisation of insolvency lawNews · 25-03-2021

Eumedion believes that targeted harmonisation of certain definitions and procedures would help investors better manage legal risks of their cross-border exposures. This is the view of Eumedion in its response to the Eurpean Commission's consultation on the convergence of insolvency law of EU Member States that was submitted today.


In December 2020, the European Commission published a consultation document on the convergence of insolvency law. Eumedion is of the opinion that discrepancies between the Member States' insolvency laws may create barriers to the free movement of capital in the internal market. In its response Eumedion refers to the diverging time-limits, lengths of procedures as well as diverging overall procedural efficiency. This may make it more difficult to anticipate the outcome for value recovery, making it harder to price risks, including for debt instruments. Eumedion points out that generally the longer restructuring processes take, the more value is destructed for investors. In its response Eumedion endorses the remark in the Final Report of the High Level Forum on the Capital Markets Union that targeted harmonisation of certain definitions and procedures would help investors better manage legal risks of their cross-border exposures. 

Eumedion supports the establishment of a European Single Access Point

Eumedion supports the establishment of a European Single Access PointNews · 03-03-2021

Financial and non-financial information of listed companies should as soon as possible be made available in a centralised European database. This publicly accessible database will support institutional investors in gathering and processing relevant information on investee companies, as Eumedion writes today in its response to the European Commission’s consultation on the establishment of a European Single Access Point (ESAP).

Essential to the success of this database is a large coverage of structured data. It is therefore of crucial importance that also non-financial information is digitally tagged and filed in a uniform manner. Of particular importance to institutional investors is furthermore the alignment of company filings in ESAP with reporting requirements such as those stemming from the Sustainable Finance Disclosure Regulation and the Taxonomy Regulation. To ensure a speedy start to the ESAP, Eumedion suggests the European Commission limits the scope of the ESAP to both financial and non-financial information that listed entities are required to make public due to the fact they have, or aim to list, securities on a European regulated market.

Eumedion pushes for legal embedding of stakeholder model at European level

Eumedion pushes for legal embedding of stakeholder model at European levelNews · 05-02-2021

The boards of all European listed companies should be required to balance the interests of all relevant stakeholders when taking their decisions. They should also be obliged to report on how the various interests have been considered in the discussions and decision-making. This follows from the today’s submitted Eumedion response to the European Commission’s consultation document on the contents of the forthcoming proposal for a European directive on sustainable corporate governance and due diligence. 


Eumedion is in favour of incorporating the ‘stakeholder principle’ into European law. This stakeholder principle can be elaborated in more detail at national level, given the specificities of the corporate governance model in individual EU Member States. Eumedion is also in favour of mandatory due diligence rules for listed companies, provided that these are fully in line with international standards, such as those of the OECD and the United Nations. Furthermore, Eumedion suggests some technical amendments to the European Company Law Directive regarding share buybacks and supports the European Commission’s idea to require companies to consider environmental, social and/or human rights expertise in the director’s nomination and selection process. Eumedion is not in favour of additional EU legislation regarding the design and content of executive remuneration policies.

Eumedion supports the majority of proposed revisions to the ICGN Global Governance Principles

Eumedion supports the majority of proposed revisions to the ICGN Global Governance PrinciplesNews · 20-01-2021

Eumedion is generally positive about the proposals to revise the Global Governance Principles (GGP) of the International Corporate Governance Network (ICGN). Eumedion only has a number of reservations regarding the proposals that are mainly inspired by Anglo-Saxon practices and regarding a number of proposals in the field of financial and non-financial reporting. This follows from the today’s submitted Eumedion reponse to the ICGN consultation document on the proposed revisions to the GGP. The GGP are used by many institutional investors in shaping their international voting and engagement policies. In its comments, Eumedion questions the proposal that all the company's directors should stand for re-election on an annual basis. Eumedion doubts whether the concept of annual re-election of all board directors is an already widely accepted principle amongst institutional investors. Eumedion points out that this concept is not common practice in a number of important continental-European countries. Eumedion suggests that shareholders of all listed companies should at least have the opportunity to put a proposal for the dismissal of one or more directors on the agenda of a shareholders meeting. Eumedion also criticises the introduction of the principle of conservatism regarding the valuation of assets and liabilities and the calculation of income and expenses. Eumedion believes that useful reporting is generally best served by standard setters to set neutral standards, and by a requirement for listed companies to apply these standards in a neutral manner. 

EFRAG PTF NFRS Outreach Event - Financial Institutions Focus

EFRAG PTF NFRS Outreach Event - Financial Institutions FocusAgenda · 18-01-2021

The EFRAG Project Task Force on preparatory work for the elaboration of possible EU non-financial reporting standards (PTF-NFRS) organises an online outreach event for collecting views of stakeholders from financial institutions on tentantive proposals of the PTF-NFRS. Click here for more information and registration.

EFRAG PTF NFRS Outreach Event - European organisations and other European countries focus

EFRAG PTF NFRS Outreach Event - European organisations and other European countries focusAgenda · 15-01-2021

The EFRAG Project Task Force on preparatory work for the elaboration of possible EU non-financial reporting standards (PTF-NFRS) organises an online outreach event for collecting views of stakeholders on tentantive proposals of the PTF-NFRS. Click here for more information and registration.

Eumedion: independence is key in possible European sustainability reporting standard setting process

Eumedion: independence is key in possible European sustainability reporting standard setting processNews · 07-01-2021

If the European Commission decides to create a European standard setter for sustainability reporting, then a non-politicised, independent process for developing such standards is key. Eumedion underlines the importance of an independent standard-setting process in its response to the preliminary proposals of the chairman of the board of the European Financial Reporting Group (EFRAG) regarding changes to the governance and financing of EFRAG. In June 2020, the European Commission invited EFRAG Chair Jean-Paul Gauzès to make recommendations on this matter if EFRAG were entrusted with the development of possible EU non-financial reporting standards. The European Commission will probably take a decision on this topic in March. 


In its response, Eumedion writes that the future members of the so-called European Non-Financial Reporting Board should be selected on the basis of professional competence, relevant experience, track record, professional background and diversity instead of a specific number of representatives from the relevant stakeholder groups. Eumedion also endorses the importance of an open and transparent non-financial reporting standard-setting process, including a consultation period of at least three months on proposed non-financial reporting standards.

Eumedion supports the IFRS Foundation's intention to create a Sustainability Standards Board

Eumedion supports the IFRS Foundation's intention to create a Sustainability Standards BoardNews · 17-12-2020

Eumedion fully supports the IFRS Foundation Trustees' plan to expand the mission of the IFRS Foundation from financial reporting to (also) sustainability reporting. Eumedion first tested the idea of a Sustainability Standards Board in a Green Paper issued in October 2019. Ever since then, the momentum for this major change in strategic direction for the IFRS Foundation has been building up strongly. Up until Eumedion's position paper in July 2020 the call for a global standard setter was most noteably echoed by Accountancy Europe and also ESMA Chair Steven Maijoor after the European Commission announced its intention to create a European standard setter. Ahead of the publication of the Trustees’ consultation paper in September, indications of support came from key stakeholders like the International Federation of Accountants and the International Organization of Securities Commissions.


Eumedion’s response today highlights the real risk that the existing 'alphabet soup' of sustainability frameworks and standard setters could spill over to a like-wise divergence in practices amongst jurisdictions. Eumedion therefore advises the IFRS Foundation to fast track as much as possible the diligent establishment of a Sustainability Sstandards Board. The sooner this Board is established, the better it can provide a global alternative for the already emerging legal initiatives of local jurisdictions. Related to this risk is our support for giving priority to developing standards for climate-related disclosures, on the condition that the Sustainability Standards Board should from the start also make inroads into other areas of sustainability reporting.

Policy Workshop on Sustainability Reporting | IFRS Consultation

Policy Workshop on Sustainability Reporting | IFRS ConsultationAgenda · 04-12-2020

The IFRS Foundation has launched a public consultation on a global approach to sustainability reporting and on the possible role of the Foundation. The European Corporate Governance Institute and the Impact Economy Foundation are organising an online workshop to discuss the consultation document. Eumedion Executive Director Rients Abma will present his views in a panel discussion on the EU perspective. For more information and registration please click here.

Eumedion focuses on climate reporting and executive remuneration in the 2021 AGM season

Eumedion focuses on climate reporting and executive remuneration in the 2021 AGM seasonNews · 13-10-2020

Climate reporting and executive remuneration are the two Eumedion focus points for the 2021 AGM season. These topics tend to be discussed in the dialogues Eumedion facilitates in the run-up to the 2021 general meetings, and occasionally also at the general meeting itself. Earlier this week, the so-called Eumedion Focus Letter 2021 was sent to all Dutch listed companies. 


Eumedion expects Dutch listed companies to align their climate reporting as much as possible with the recommendations of the Task Force on Climate-related Disclosures (TCFD) and of the European Commission. Eumedion also urges companies to formulate ambitious greenhouse gas emission reduction targets and to report clearly on the progress made in that respect. Furthermore, Eumedion encourages companies to set a deadline for becoming a ‘carbon neutral’ company.


Eumedion also believes that executives should feel the 'pain' of the current corona crisis if the company is forced to apply for government support, lay off employees or (significantly) reduce or cancel the dividend pay-out. In such situations, Eumedion expects the supervisory board to temporarily reduce the executives’fixed salary, cancel the 2020 annual bonus and/or not grant (conditional) performance shares or options in 2021. 

“Virtual AGMs are here to stay"; report of the webinar on the future of the AGM

“Virtual AGMs are here to stayNews · 05-10-2020

The possibility of holding a digital shareholders' meeting (AGM) must be structurally incorporated into Dutch company law. It should also be made possible for listed companies, within the framework of the shareholders' meeting, to decouple the discussion and accountability part of an AGM from the voting part. This was the view of a majority of participants in the webinar on The Future of AGMs held on 30 September. The webinar was organised by Eumedion, Clifford Chance and Euronext. The speakers and participants agreed that Dutch listed companies should have more flexibility in choosing the best AGM format.


During the webinar, Clifford Chance civil law notary and partner Mark Jan Arends gave an overview of the emergency law drawn up this Spring that made it possible for the Dutch listed company to hold a virtual AGM this year. He noted, among other things, that companies have dealt with the right of shareholders to ask questions in quite different ways. For example, DSM limited the number of questions that could be submitted prior to the AGM to a maximum of five per shareholder, Airbus did not offer shareholders the opportunity to ask follow-up questions, and Royal Dutch Shell held the Q and A session between the board and shareholders prior to the voting deadline for shareholders. He was in favour of a structural, legal embedding for the possibility of holding digital AGMs.


Subsequently, Adyen’s corporate secretary Brigitte van den Bosch, gave a presentation on how Adyen prepared and held the virtual AGM this year. Important topics included talks with investors and shareholders on AGM-related matters prior to the AGM. She said that this preparation was one of the reasons why the virtual AGM was a success. She too was very much in favour of being able to hold a virtual AGM in the future.


Eumedion executive director Rients Abma then presented the main findings and conclusions of institutional investors regarding the virtual AGM season 2020. He listed seven positive points, including better opportunities for foreign shareholders to participate and a lower AGM carbon footprint. Nevertheless, he also mentioned a number of points for improvement. He found the lack of live interaction between management, the supervisory board, the auditor and shareholders at most AGMs to be the main drawback. He also found the inability of a shareholder to make a live statement at the AGM to be a shortcoming. He felt that in the future listed companies should be given more flexibility to choose the 'AGM format': the physical AGM, the hybrid AGM, the virtual AGM and the possibility to split the discussion part of the AGM from the voting part, as Royal Dutch Shell did this season. However, these options should first be embedded into the company’s articles of association.


During the subsequent virtual discussion with the public, the advantages and disadvantages of the various AGM formats, the need to embed the formats in the articles of association and the advantages and disadvantages of a 'split' AGM were highlighted.

Eumedion calls on IASB to enhance disclosures on reverse factoring arrangements

Eumedion calls on IASB to enhance disclosures on reverse factoring arrangementsNews · 02-10-2020

An increasing number of companies are asking a financial institution to pay their suppliers, while paying the financial institution at a later instance. Such arrangements are identified as reverse factoring or Supply Chain Financing (‘SCF’) arrangements. Surprisingly few companies report on these arrangements. The IFRS Interpretations Committee tentatively concluded that the IFRS standards are sufficiently clear in how reverse factoring arrangements should be treated. If there is a material difference in the payment term of the supplier and the financial institution, the entire resulting liability should be categorised as a financial liability. In such a case, the reported amounts payables become meaningless. In Eumedion's response to the tentative IFRIC interpretation, Eumedion explains why payables are important for investors and why this results an overly pessimistic picture of the company. We suggest what disclosure would help investors assess what part of the liability resulting from the SCF arrangement is an in-substance payable and what part is an in-substance financial liability.

Eumedion supports IASB proposals that facilitate the comparison of ‘operating profit’

Eumedion supports IASB proposals that facilitate the comparison of ‘operating profit’News · 02-10-2020

Eumedion foresees significant enhancements in the insight and comparability of IFRS financial statements as a result from the proposed changes to IFRS by the International Accounting Standards Board (IASB). So says Eumedion in its response to the IASB’s Exposure Draft 'General Presentation and Disclosures’. The IASB proposes a definition of Operating profit and similar subtotals. Many investors assume that definitions for widely used subtotals already exist, but for most of them this is not the case. The proposals will address the current significant and unpredictable differences in definitions between companies. When a company introduces its own definitions of certain subtotals, it will be required to reconcilliate them to a nearby IFRS defined subtotal. Furthermore, more strict principles are introduced that clarify when line items can be aggregated and when they should be disaggregated. All in all are these proposals excellent news for investors.


Eumedion also sees room for further enhancements of the proposals. Investors are not in need of a additional proposed subtotal to distinguish between results of associates that the proposals define as ‘integral’ and associates that are not. The proposed IFRS variant of the widely used subtotal Earnings Before Interest Taxes Depreciation and Amortisation (EBITDA) is not in line with how investors and companies define EBITDA in practice. Eumedion proposes to not only exclude Depreciation and Amortisation, but to also exclude specific impairments, like goodwill.

Eumedion supports the establishment of an EU Green Bond Standard

Eumedion supports the establishment of an EU Green Bond StandardNews · 01-10-2020

An EU Green Bond Standard (EU GBS) can help promote a consistent, credible, efficient and comparable market for EU green bonds. Eumedion writes this today in its response to the European Commission’s (EC) call for feedback on the establishment of an EU GBS.


The EC has asked stakeholders to provide their input on how it can take forward the recommendations published by the Technical Expert Group on Sustainable Finance (TEG) back in March of this year. Eumedion strongly supports the core elements of an EU GBS as proposed by the TEG, namely the Green Bond Framework, Allocation Report and Impact Report. In order to establish a practical and effective EU GBS, Eumedion draws attention to several possible issues, e.g. with regard to the further elaboration of the ‘do no significant harm’ principle where it regards green bonds used as refinancing tool and the refinement of the minimum safeguards for social and governance factors.


Also, Eumedion has indicated not to be a strong supporter of financial incentives for issuers or investors to support the uptake of EU Green Bonds. Rather, Eumedion is of the opinion that any incentives aimed at realising an increase in eligible projects and assets (and thus an increase in new green investments) should be accomplished at the level of general (climate) policy, stimulating or discouraging certain economic activities in relation to environmental objectives.

Webinar 'The Future of AGMs'

Webinar 'The Future of AGMs'Agenda · 30-09-2020

One of the many challenges listed companies faced in the wake of the COVID-19 pandemic was how to organise their AGMs remotely amidst lockdown and social distancing measures while still ensuring transparency and shareholder engagement. Many companies turned to hybrid or virtual AGMs, and with great success.

Some experts suggest that hybrid and virtual AGMs are here to stay and will remain part of the corporate landscape. To get insight into what to expect from the future of AGMsEumedion, Euronext and Clifford Chance will organise a webinar on Wednesday 30th September from 11:00 to 12:30 CET.

We have an exciting line-up of speakers from Clifford Chance, Adyen, Eumedion and Euronext, all providing different perspectives on this hot topic. They will be covering topics such as:

  • Legal requirements of AGMs – changes since COVID-19 and what to expect from the years to come | Mark Jan Arends, Notary and Partner at Clifford Chance
  • Adyen’s recent AGM experience – expectations, results and the future | Brigitte van den Bosch, Company Secretary at Adyen
  • The perspective of institutional investors on virtual / hybrid AGMs | Rients Abma, Executive Director at Eumedion
  • Tools available to ensure a successful AGM | Laurens van Dehn, Sales Manager, Benelux at Euronext Corporate Services

For first-hand experiences, best practices and trends on the horizon for AGMs, join our interactive webinar. Sign up here (free access). 

Eumedion pushes for revision of ICGN Global Governance Principles

Eumedion pushes for revision of ICGN Global Governance PrinciplesNews · 14-09-2020

Eumedion believes that the Global Governance Principles (GGP) should be revised in order to better protect shareholders from possible abusive actions by controlling shareholders. This follows from the today’s submitted Eumedion response to the consultation paper of the International Corporate Governance Network (ICGN) on the GGP.


Last July ICGN published a consultation paper about the purpose, use, structure and content of the GGP. In its response Eumedion makes some suggestions for further improvement of the guidance. Eumedion is of the opinion that minority shareholders should be protected from possible abusive actions by controlling shareholders. Eumedion believes that the current guidance fails to properly achieve this. Eumedion believes that in listed companies with a controlling shareholder the majority of the members of the supervisory or one-tier board should be independent. Furthermore, Eumedion believes that the company and the controlling shareholder should draw up a relationship agreement which at least confirms that all transactions between them will be agreed on customary market terms, regulates any representation on the board and contains assurances that all appearance of insider trading will be combatted. Eumedion suggests to reflect this in the GGP. In its response Eumedion also makes some suggestions in the field of reporting, the scope of the dialogue with the board and the inclusion of new topics in the GGP.

Ron Gruijters appointed to Task Force for possible establishment of EU standard setter for non-financial reporting

Ron Gruijters appointed to Task Force for possible establishment of EU standard setter for non-financial reportingNews · 07-09-2020

The European Financial Reporting Advisory Group (EFRAG) has appointed Eumedion's sustainability policy officer Ron Gruijters to its Project Task Force on preparatory work for the elaboration of possible EU non-financial reporting standars. At the beginning of 2021, the 35-strong multi-stakeholder Task Force is to report, among other things, on the possibility of using existing non-financial reporting standards (such as those of the Global Reporting Initiative or of the Sustainability Accounting Standards Board) for this purpose, how the standards can be structured, whether separate standards should be developed for the financial sector, whether the standards should be developed in phases, starting with a number of general key performance indicators, and whether separate standards should be developed for small and medium-sized enterprises. Prior to the publication of the final report, a progress report should be delivered by the end of October 2020. The Task Force will also consider whether the governance structure and funding of EFRAG should be adapted should the European Commission decide to designate EFRAG as the standard setter for non-financial reporting standards. The Task Force is chaired by Patrick de Cambourg, President of the French Accounting Standards Board.

Eumedion: data are key to consistent ESG disclosures by institutional investors

Eumedion: data are key to consistent ESG disclosures by institutional investorsNews · 01-09-2020

The success of consistent and comparable sustainability disclosures by financial market participants under the ESG Disclosure Regulation will be highly dependent onESG data availability and ESG data quality. Eumedion writes this in its response to the consultation on the draft Regulatory Technical Standards (RTS) under the ESG Disclosures Regulation issued by the joint European Supervisory Authorities (ESAs). 


While Eumedion supports the ESAs in developing a comprehensive framework for disclosure on the broader set of ESG factors, much of the data needed for consistent and comparable disclosure on material ESG factors is simply not (yet) available under the present, materiality-based requirements of the Non-financial information directive for EU listed companies. Additionally, Eumedion believes that the proposed technical standards for ESG disclosures are insufficiently aligned with other European ESG disclosure requirements for the financial sector, such as those stemming from the Benchmark Regulation. For these reasons, Eumedion calls upon the ESAs to both consider a smaller (core) set of indicators with a focus on materiality, and to address the methodological alignment with other legal requirements.This will increase the meaningfulness and relevance of the information provided to end-investors.

Eumedion supports IIRC proposals to revise Integrated Reporting Framework

Eumedion supports IIRC proposals to revise Integrated Reporting FrameworkNews · 19-08-2020

Eumedion generally supports the various clarifications proposed throughout the consultation draft of the revision of the International Integrated Reporting Framework. Eumedion writes this today in its response to the International Integrated Reporting Council’s (IIRC) call for feedback on the revision of the Integrated Reporting Framework. Such clarifications address, for example, the statement of responsibility for an integrated report and the need to differentiate between outputs and outcomes. Eumedion does emphasise, however, that the root causes of preparers incorrectly or only partially applying the Integrated Reporting Framework, may not necessarily be due to how the various concepts are presented in the current version of the Framework. Therefore, Eumedion does not readily expect that the clarifications will lead to substantial improvement in the quality of integrated reporting per se. In this light, Eumedion encourages the IIRC to further elaborate on the concept of integrated thinking, as well as to cooperate towards the creation of a global standard setter for the management report (as outlined in the Eumedion position paper ‘Towards a global, investor focused standard setter for corporate non-financial reporting’.


In the strategic, more forward looking part of the consultation questionnaire, Eumedion reiterates its strong disagreement with broadening the primary audience of the integrated report to all stakeholders of the company. This is in line with the Eumedion feedback on the Focused Engagement consultation earlier this year.