Written by Richard Howitt, Strategic advisor on corporate sustainability, Senior Advisor at Frank Bold, formerly MEP and CEO of the IIRC. The article is a part of the series of monthly articles on sustainability reporting in 2021.

One of the key drivers to combine regulation with standard-setting for sustainability reporting by business in Europe, has come through overwhelming pressure from private investors. 

The voice of the European investment management industry, EFAMA, representing 58 corporate members, recently called on the EU to ’maintain the ambition’ of its new Corporate Sustainability Reporting Directive, (CSRD), adding: ‘Time is of the essence.”

Frank Bold put together a panel of three leading investor voices from Triodos, Robeco and Deka Investments, firms collectively responsible for EUR half a trillion assets under management, to explore why the proposal is so important to investors and what are some of the lessons as EU institutions debate and agree the new directive.

There is no doubt that the new regulation is required, amongst the responses.

“We’re happy to see that the regulator focuses on sustainability. More transparency and comparability will help prevent greenwashing by asset managers and financial institutions,” according to Roeland Tso, Investment Strategist, at Triodos Investment Management, which describes itself as a leading globally active impact investor.

Such forthright advocacy in favour of regulation is backed up by investor responses to the European Commission’s public consultation on the proposal for a directive, 

Consistency, comparability and reliability of sustainability information are three often cited arguments in support.

“Shifting to a Regulation to describe reporting requirements would help improve the consistency of reporting,” wrote Ingrid Holmes, then Director and Head of Policy at Federated Hermes International.

Such unanimity for the mandatory requirements reflects a huge shift in opinion amongst investors in recent years, reflected in one international survey of 57 asset managers and owners, in which no fewer than 82% supported the need for regulation...