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Eumedion broadly supports the proposed Corporate Sustainability Due Diligence Directive

Eumedion broadly supports the proposed Corporate Sustainability Due Diligence DirectiveNews · 19-04-2022

Eumedion is generally positive about the proposed Corporate Sustainability Due Diligence Directive (CSDD proposal). This is evident from the Eumedion feedback statement on the proposed directive, which was submitted today. 


According to Eumedion, the proposed directive will help to ensure that large European and non-European companies operating in the European market do business in a decent and fair manner throughout the entire value chain. Eumedion does feel, however, that the CSDD proposal should be strengthened on a number of points. For example, companies should not only identify and prevent adverse impacts of their activities on human rights and the environment, but also on climate. In addition, Eumedion believes that the climate action plans that large companies have to prepare on the basis of the proposed directive should contain science-based CO2 emission reduction targets and that such plans should be verified by an independent, external party. Finally, Eumedion is of the opinion that the proposal for a directive must be clarified on some points. It is unclear, for instance, whether the proposed directive also applies to the investee companies of institutional investors and, if so, what the investors’ obligations in that respect are. In addition, Eumedion recommends that the scope of the proposed directive be aligned with other relevant European financial sustainability legislation, such as the CSRDSFDR and the Taxonomy Regulation.

Eumedion: proposals for revision of Dutch corporate governance code should have been more ambitious

Eumedion: proposals for revision of Dutch corporate governance code should have been more ambitiousNews · 15-04-2022

The proposals of the Dutch Corporate Governance Code Monitoring Committee concerning the more detailed interpretation of the concept of 'long-term value creation' should have been more ambitious. This is what Eumedion writes in its reaction to the proposals of the Monitoring Committee for updating the Dutch corporate governance code, which was submitted today.


Eumedion believes that the proposals in question more or less codify existing market practice instead of stimulating the "middle group" and laggards of Dutch listed companies to align themselves with the best practices in the market, which was the original objective of the Code. Eumedion notes that the proposals of the European Commission concerning corporate sustainability reporting ('CSRD') and concerning corporate sustainability due diligence ('CSDD proposal') go much further than the proposals presented by the Monitoring Committee. Eumedion is also disappointed that the Monitoring Committee has failed to extend the scope of the so-called in-control statement from financial reporting risks to (also) compliance and operational risks. Eumedion does appreciate, however, that the Monitoring Committee proposes to include important parts of the Eumedion Stewardship Code in the revised Dutch corporate governance code. "This underlines our belief that the engagement and voting policy of shareholders should also (ultimately) facilitate the strategy of Dutch listed companies aimed at long-term value creation; the central focus of the Code," according to Eumedion. Eumedion also generally supports the proposals on diversity and inclusion and on the internal audit function.

Eumedion: companies may only have a completely virtual registered office under certain conditions

Eumedion: companies may only have a completely virtual registered office under certain conditionsNews · 08-04-2022

The European Commission should be cautious about offering companies the option of a completely virtual registered office. If such an option is offered, there must be strict safeguards for the integrity of the company concerned. 


This is what Eumedion writes in its response to the consultation of the European Commission on upgrading digital company law, which was submitted today. In the consultation document, the European Commission asks, among other things, whether European companies should still be obliged to have a physical registered office. Now that an increasing number of companies no longer have permanent physical offices, the European Commission wants to examine whether companies can suffice with a virtual domicile. Eumedion warns the European Commission that this will make it even easier for companies to evade taxes, to conduct money laundering activities, avoid sanctions and circumvent shareholders' rights. In its response, Eumedion encourages the European Commission to incorporate in European company law the possibility for all European companies to organise a hybrid shareholders' meeting as well as a shareholders' meeting spread over time.

Eumedion calls for amendments to the proposed ESAP regulation

Eumedion calls for amendments to the proposed ESAP regulationNews · 14-03-2022

The proposed regulation regarding the creation of a European Single Access Point for corporate reporting ('ESAP') should be amended in a number of respects. Eumedion advocates this in its today's submitted feedback statement on the ESAP proposal.


Some of the key issues to finetune are, first of all, to establish a procedure that allows investors to fully rely on the already expressed ambition that corporate reporting will not be publicly available in ESAP any later than any other platform for communication. Secondly, Eumedion highlights the growing importance of cross referencing and the need for ESAP to establish procedures that facilitate reporting entities in creating cross references. ESAP could facilitate that cross references between related filings will remain valid over time. And thirdly, Eumedion strongly advocates against erasing past filings after ten years and proposes filings to remain indefinitely available, in line with the indefinite availability of filings in a comparable EDGAR database the United States.

Eumedion calls for timely delivery of uniform sustainability reporting standards

Eumedion calls for timely delivery of uniform sustainability reporting standardsNews · 08-03-2022

Ahead of the vote by the European Parliament (EP) on the proposed Corporate Sustainability Reporting Directive (CSRD), Eumedion calls on the EP to address three key issues in the final text of the directive. This follows from the statement Eumedion has published today.


The three key issues concern, first of all, a timely delivery of sustainability reporting standards. In case the EP were to consider postponing the entry into force of the new CSRD reporting obligations, Eumedion considers it paramount to not unduly postpone delivery of the sustainability reporting standards and make them available for companies preferably (well) before the end of 2022. Secondly, Eumedion calls on the EP to establish the global sustainability reporting standards under development by the International Sustainability Standards Board as the starting point for the three-year evaluation of European reporting standards. This will further contribute to the much-needed global harmonisation of sustainability reporting standards, while leaving sufficient room for European standards to complement these global standards by additionally reflecting specific EU policy objectives and EU legislation. Lastly, Eumedion is strongly in favour of retaining the option to engage the statutory auditor in the assurance of sustainability information. A legal requirement to provide assurance of sustainability information by another person than the external auditor could negatively affect the connectivity of financial statements and sustainability information – one of the objectives of the CSRD – and may lead to duplication of work and increased costs.

Virtual ESG Updates Session

Virtual ESG Updates SessionAgenda · 02-03-2022

Eumedion will organise a virtual ESG Updates Session for its members on  2 March from 1pm to 2 pm CET. The following documents will be discussed: i) the consultation document on amendments to the Dutch Corporate Governance Code and ii) the proposal for a European Directive on sustainable corporate governance and due diligence. Registration is possible for representatives of Eumedion members via info@eumedion.nl.  

Eumedion: cultural factors mainly responsible for relatively low number of IPOs in Europe

Eumedion: cultural factors mainly responsible for relatively low number of IPOs in EuropeNews · 18-02-2022

The relatively low number of IPOs in Europe, compared to the United States, can be explained primarily by cultural factors rather than by excessively strict regulations. This is the Eumedion's key message in its response to the European consultation on making the European public capital markets more attractive to small and medium-sized companies in particular.

In its response, Eumedion points out that the lack of a real equity culture in Europe and European entrepreneurs' restraint on being permanently in the public spotlight (both personally and their company) are greater obstacles to a European IPO than the statutory rules for an IPO and the ongoing transparency obligations afterwards. After all, the US prospectus, listing and liability rules are even stricter than the European rules. Eumedion is therefore recommending that the European Commission show restraint in relaxing the prospectus and listing rules. The very purpose of these rules is to protect investors in order to encourage them to invest in (potential) listed companies. From that point of view, Eumedion is not in favour of major relaxations in the prospectus and market abuse regulations, nor is it in favour of European legislation to make it possible for companies to issue shares with differential voting rights. Eumedion does support further European harmonisation of the existing listing rules and the introduction of European supervision on prospectuses.

Eumedion in favour of strengthening European rules on and enforcement of financial reporting

Eumedion in favour of strengthening European rules on and enforcement of financial reportingNews · 27-01-2022

European supervision on the financial reporting of European listed companies and on the largest four audit firms should be introduced. All large European listed companies must establish an internal audit function (IAF) and include an 'in control statement' in their annual report. The option in the European Audit Regulation to allow companies to rotate from audit firm after 20 years should be cancelled. These are the main messages of Eumedion’s response to the European consultation on the strengthening of the quality of corporate reporting and its enforcement. The European Commission launched this consultation at the end of last year as a result of the extensive Wirecard accounting scandal in 2020. 


Eumedion writes in its response that it is precisely the supervision of financial reporting and audit firms that lend themselves to harmonised, European supervision. The application of the International Financial Reporting Standards requires at least European supervision to prevent national interpretations. The largest audit firms are all part of large, international organisations. Moreover, international (audit) standards are also applicable to these organisations. In order to strengthen the internal 'lines of defence' for reporting, Eumedion believes it is now the right moment to enshrine in European legislation that large listed companies must set up an IAF and that boards should provide reasonable assurance on the effectiveness of the internal risk management and control systems. In its response, Eumedion opposes suggestions such as the encouragement of joint audits, external supervision of audit committees and the introduction of a European passporting system for auditors and audit firms.

Eumedion publishes revised version of its Corporate Governance Manual

Eumedion publishes revised version of its Corporate Governance ManualNews · 23-12-2021

Eumedion has updated its Corporate Governance Manual in response to the entry into force of new legislation and regulations and changes to its own voting guidelines. The previous version dated from 2017.


The most important changes are the inclusion of the Stewardship Code and the impact of new statutory rules on shareholders' rights and obligations and on the voting items on the agendas of shareholders' meetings. In addition, the Eumedion recommendations with regard to the structure of executive remuneration have been amended on one point. As of 1 January 2022, Eumedion members expect Dutch listed companies that "a substantial part" of the variable remuneration elements is based on environmental, social and/or governance ('ESG') goals. Until now, the only 'recommendation' was that part of the variable remuneration was made dependent on the achievement of ESG objectives. Eumedion members use the Manual in determining their voting behaviour at the shareholders' meetings of Dutch listed companies. It is also used in Eumedion's decision-making process to alert its members to a controversial voting item on the shareholders' meeting agenda of a Dutch listed company.

Eumedion position statement on special purpose acquisition companies

Eumedion position statement on special purpose acquisition companiesNews · 02-12-2021

Eumedion has published a position statement on special purpose acquisition companies (SPACs). The statement discusses: (i) what a SPAC is; (ii) the benefits of and concerns regarding SPACs; (iii) the current regulatory and listing requirements; and (iv) Eumedion's key messages in relation to SPAC IPOs.


In the statement, Eumedion mainly pleads for more structured information at the time of the announcement of a SPAC to enter into a business combination with a 'real' company.

Eumedion: ISSB should finalise IASB’s Management Commentary project

Eumedion: ISSB should finalise IASB’s Management Commentary projectNews · 22-11-2021

The Management Commentary Practice Statement project, initiated by the International Accounting Standards Board (IASB), should be finalised in standard setting by the recently announced International Sustainability Standards Board (ISSB). Eumedion attested this in its response to the IASB’s Exposure Draft (ED) on this topic. 


The ED succeeds in proposing investor relevant guidance on a great variety of topics for the management report. However, Eumedion expects standards from the ISSB to be more auditable and more enforceable than a practice statement of the IASB.

Eumedion: option to temporarily ban short selling should be eliminated

Eumedion: option to temporarily ban short selling should be eliminatedNews · 19-11-2021

Eumedion believes that the European Securities and Markets Authority (ESMA) should seriously consider eliminating the existing possibility for supervisory authorities to temporarily ban short selling in a certain share. This follows from Eumedion's response submitted today to ESMA's consultation on the review of certain elements of the short selling regulation.


ESMA’s consultation document shows that in practice the temporary short selling bans appear to have little or no effect, while those bans can seriously harm market liquidity and investors’ trust in EU markets. Should ESMA nevertheless wish to preserve the possibility of short term bans, Eumedion opines that the scope should not be changed from a ban on short selling into a ban on entering into or increasing net short positions. This would seriously impede institutional investors' ability to hedge their risks.


Several other proposals made by ESMA in the consultation document can count on Eumedion's support. For example, Eumedion is positive about ESMA's proposal for a centralised system for the notification of substantial short positions and about the introduction of a requirement for supervisory authorities to regularly publish anonymised and aggregated net short positions. In its response, Eumedion also makes a number of suggestions to make the notification of substantial short positions less costly for institutional investors. For example, Eumedion recommends that market parties will no longer be obliged to notify every 0.1% change in the net short position, but only report a 0.2% change.

Extraordinary Eumedion Members Meeting

Extraordinary Eumedion Members meetingAgenda · 17-11-2021

A virtual Extraordinary Eumedion Members Meeting will be held on 17 November 2021 at 1.00 PM CET. The agenda includes the approval of the proposal to amend the Eumedion Articles of Association. The resolution to approve the amended Articles of Association requires a majority of two-thirds of the votes cast at a meeting at which at least two-thirds of the members are present or represented. If the required quorum is not reached at the meeting on 17 November, the proposal to amend the Articles of Association will be placed on the agenda for the regular Eumedion Members Meeting that will be held on 14 December at 4.00 PM CET. Regardless of the number of members present or represented, a legally binding decision can be taken at this meeting on the proposed amendment of the Articles of Association, provided it is taken with a majority of two-thirds of the votes cast. The proposed amendments to a number of Eumedion regulations will also be discussed at the meeting on 17 November. Eumedion members can register via info@eumedion.nl.

Eumedion welcomes the IFRS Foundation's decision to establish the International Sustainability Standards Board

Eumedion welcomes the IFRS Foundation's decision to establish the International Sustainability Standards BoardNews · 03-11-2021

Eumedion applauds the decision of the IFRS Foundation (Foundation) to establish the International Sustainability Standards Board (ISSB). The Foundation already has a proven track record for fostering high quality financial reporting around the globe. Now investors and companies have the prospect of a single global language for sustainability reporting through standards issued by the ISSB. We expect all stakeholders to benefit from the ISSB’s efforts.


Eumedion is delighted to notice that the ISSB is set to mirror the thinking in our 2019 Green Paper and our subsequent 2020 Position Paper ‘Towards a global investor focused standard setter for non-financial reporting’ on all key aspects. Notably, we see the ISSB’s clear ambition to also set industry-specific standards as pivotal for enhancing the relevance of sustainability reporting and critical for a successful outreach to stakeholders.


Eumedion praises the fruitful collaboration within the Technical Readiness Working Group (TRWG). The TRWG consisted of representatives from several leading sustainability reporting frameworks. This collaboration resulted in a prototype standard on climate-related disclosures and a prototype standard that sets out general sustainability disclosure requirements. These prototypes have two virtues. First, timeliness as these allow the ISSB to get input from stakeholders earlier and complete its due process sooner. And second, the collaboration cemented a level of trust that resulted in both the Value Reporting Foundation and the Carbon Disclosure Standards Board to be formally integrated into the IFRS Foundation in 2022. We see this consolidation as adding to an expedient build-up of the necessary intellectual capital on sustainability topics within the IFRS Foundation’s organisation.


The Trustees will be appointing a total of 14 ISSB board members. Eumedion reiterates its earlier stance that since the purpose of the Foundation is essentially to help investors, we would consider any outcome of less than 25% board members with an investor-focus in the ISSB to be deficient.


We are very impressed by the momentum and support that the Foundation has managed to generate over the past 24 months. Eumedion will continue to support the Foundation’s efforts to create a comprehensive global baseline of high-quality sustainability reporting standards.

Research report: Dutch listed companies must take more responsibility for negative externalities of their business activities

Research report: Dutch listed companies must take more responsibility for negative externalities of their business activitiesNews · 26-10-2021

Dutch listed companies must take responsibility for the negative effects that their business activities and supply chain have on people and planet by aligning their business strategy more formally with planetary boundaries. This is not only about fighting dangerous climate change, but also, for example, about counteracting the loss of biodiversity and the need to think and act circularly.


This is one of the main recommendations of the research report commissioned by Eumedion and carried out by Maastricht University (MU) regarding the sustainability embedding practices in Dutch listed companies. MU examined the 2020 annual reports of 35 Dutch listed companies and interviewed 97 executives, supervisory directors and senior managers of these companies. The MU research report was published today and will be officially presented and discussed at the Eumedion annual conference that will be held on 2 November 2021.


The study shows, among other things, that the Dutch listed companies regard sustainability more as an opportunity than a risk. Many companies do not communicate (much) about sustainability risks, such as waste, climate change and human rights issues, in their risk management sections. The researchers also recommend that companies make their purpose statements more clear and meaningful and to connect them to their strategic objectives and targets. Furthermore, the study shows that the subject of sustainability is still barely embedded in the skill profiles of new supervisory directors. In addition, companies communicate little about any required sustainability competencies for executives. This is in spite of the fact that management literature indicates that executives in particular have a major influence on the creation of a corporate culture that supports both the strategic sustainability objectives and the financial performance of the company. Finally, the researchers recommend professionalising and better structuring the dialogue with the various stakeholders and reporting on it more extensively. According to the researchers, companies should inform stakeholders much better about due diligence procedures, the reliability of the reported non-financial information, sustainability measures in incentive schemes and key performance indicators with regard to waste, water and business travel.


Preliminary Eumedion comments

According to Eumedion, the research report provides a good picture of how sustainability is embedded within Dutch listed companies. What is positive is that many companies have already included specific sustainability objectives in their strategy, and are willing and able to be held accountable for this. Moreover, they see plenty of opportunities to earn money with sustainability. At the same time, companies generally still pay too little attention to tackling the ecological and social externalities of their business activities. In particular, they are not yet addressing the transition to a circular economy and the protection and restoration of biodiversity. In addition, the subject of sustainability is not yet explicitly embedded in the diversity and competence matrices for executive and supervisory board members. The MU researchers make clear and practical recommendations in these areas, which Eumedion embraces. Some of these recommendations have already been included in the 2022 Eumedion Focus Letter that was sent to the Dutch listed companies and Eumedion will include the other recommendations in the dialogues that will be held with the Dutch listed companies prior to the 2022 shareholders’ meetings. The fact that the listed companies are currently using almost 50 different reporting frameworks for sustainability information underlines Eumedion's commitment to achieving a uniform and authoritative reporting framework for sustainability information at the highest possible international level. 

Institutional investors: all Dutch listed companies must prepare a climate transition action plan

Institutional investors: all Dutch listed companies must prepare a climate transition action planNews · 13-10-2021

All Dutch listed companies are expected to prepare a transition plan in the coming year in order to operate completely climate-neutral by 2050 at the latest. The transition plan must contain short-, medium- and long-term CO2 emission reduction targets and explain how the company intends to achieve these targets. The plan must be discussed with the shareholders. Companies that have a relatively large impact on climate change or that otherwise face major climate risks are encouraged to submit their progress report on the road to climate neutrality to the shareholders’ meeting for an advisory vote.


This request is incorporated in the Focus Letter 2022 that Eumedion has sent to all Dutch listed companies. The Focus Letter contains the topics that tend to be discussed in the dialogues Eumedion facilitates between Dutch listed companies and Eumedion members in the run-up to the 2022 shareholders’ meetings. The companies are encouraged to have the CO2 emissions reduction targets validated by the Science Based Targets initiative (SBTi) and reviewed by the external auditor. The reduction targets must relate to both the company's own activities and those of suppliers, customers and end users (i.e. the entire value chain; the so-called scope 1, 2 and 3).


Eumedion writes in the letter that the next ten years are crucial for still being able to prevent dangerous climate change. Eumedion believes that all listed companies, shareholders and external auditors have a responsibility to contribute to this objective (however small it may be). Companies are expected to report annually on their progress in meeting their CO2 reduction targets. Shareholders can then monitor progress and, if necessary, push for acceleration. External auditors can issue an independent assessment of the 'thoroughness' of the reduction targets and how they fit in with the company's operational and financial plans.


In addition to preparing climate transition plan, Eumedion has requested Dutch listed companies to also report on their diversity and inclusiveness policy (including objectives) for the entire workforce and on the effectiveness of their measures (and procedures) to ensure that human rights are safeguarded throughout their value chain.

Eumedion sees ample room for further improvements to International Financial Reporting Standards

Eumedion sees ample room for further improvements to International Financial Reporting StandardsNews · 23-09-2021

Eumedion pushes for three key topics that should drive the agenda of the International Accounting Standards Board (IASB) for the next five years. First, the IFRS 8 Operating Segments standard is in need of important improvements. Second, the  IASB could improve disclosure and measurement requirements for companies that have been involved in merger & acquisition activities. And thirdly, some projects may need to be transferred to the IASB’s sister organisation, the International Sustainability Standards Board (ISSB). The ISSB is expected to be established later this year at the COP26 climate conference. Eumedion also suggest a research project to better serve corporate bond investors. 


The IASB conducts its agenda consultation process every five years.  In today's submitted response, Eumedion also includes feedback on all the 22 potential topics for standard setting activities identified by the IASB.

Eumedion calls on EFRAG to further clarify and strengthen due process procedures regarding EU sustainability reporting standard-setting

Eumedion calls on EFRAG to further clarify and strengthen due process procedures regarding EU sustainability reporting standard-settingNews · 08-09-2021

Eumedion considers strong due process procedures crucial to the development of high-quality European sustainability reporting standards. EFRAG’s public consultation paper on this topic provides a good starting point for developing these procedures. In its response, published today, Eumedion highlights several issues in order to make these procedures as thorough, inclusive and transparent as possible.


Eumedion’s response revolves around three main focus areas. The first one considers that the due process procedures are highly dependent on the (still to be established) new governance and structure of EFRAG, which in our view requires further clarification on the roles and responsibilities of various bodies in relation to the proposed due process procedures. Secondly, Eumedion considers the establishment of a due process oversight committee critical to a strong due process. This committee should be guided in its work by a due process handbook providing all the necessary procedures to be followed and criteria to be met throughout the standard setting process, for example with respect to any possible request to shorten the default consultation period of 120 days. Most notably, the initial public consultation following the current interim work, which is expected to be extensive and of crucial importance to further development of the European sustainability reporting standards, should not be automatically subject to a shortened consultation period. Lastly, Eumedion calls on EFRAG to clarify both the role and the proposed membership of the new Consultative Forum. Eumedion in any case assumes that this membership includes National Standard Setters in Europe who might elect to be part of the Consultative Forum.

Eumedion favours extending the green taxonomy to social and governance factors

Eumedion favours extending the green taxonomy to social and governance factorsNews · 27-08-2021

Eumedion is very much in favour of extending the ‘green taxonomy’ to social and governance factors in order to further strengthen the definition and measurement of all sustainability matters. This would fulfil an important pre-condition for sustainable investment. Eumedion writes this today in her feedback to the draft report of the Platform on Sustainable Finance on this matter.


The European advisory body on sustainable finance topics has recently published its draft report on the possible extension of the taxonomy, for example to social factors. The Platform has done this at the request of the European Commission, per the requirement in the Taxonomy Regulation. In the report, the Platform discusses a.o. the options for the design of a social taxonomy. Eumedion generally supports the draft report. In addition to extending the taxonomy, Eumedion also underlines the need to adequately focus on the aspect of ‘interconnection’ between sustainability factors as well. It has been well established that environmental topics have (both in the short and long term) a social dimension, while social topics can prove to have an environmental dimension as well. Furthermore, Eumedion stresses the need to develop specific standards in the area of corporate governance.These should be added as ‘minimum safeguard’ to the application of the taxonomy, to prevent economic activities being labelled as sustainable if a company has flagrant deviations from generally accepted corporate governance standards (e.g. minimum shareholder rights, disclosure, risk management and independence of non-executives).

Eumedion supports proposed changes to the IFRS Foundation Constitution

Eumedion supports proposed changes to the IFRS Foundation ConstitutionNews · 15-07-2021

Eumedion welcomes the proposed amendments to the constitution of the IFRS Foundation. The proposed amendments pave the way for the establishment of a global sustainability reportings standards setter as propagated by Eumedion. This the key message of today's submitted Eumedion response to the consultation document of the IFRS Foundation.


The proposals expand the objectives of the Foundation to encompass the development of globally accepted sustainability reporting standards. They will mandate the IFRS Trustees to create an International Sustainability Standards Board. The proposals illustrate how well aligned the Foundation's intentions are with the vision Eumedion expressed in its 2020 position paper ‘Towards a global, investor focused standard setter for corporate sustainability reporting’. Eumedion complements its strong support for the overall direction of the Foundation on this matter with feedback on specific topics.