In the first sentence of the preamble Eumedion links “responsible use of the rights attached to shares” to  “creating long term value for the company and all its stakeholders, including shareholders”. I believe it is to be applauded that a representative of institutional investors positions shareholders amidst stakeholders instead of claiming a superior status.

Eumedion consistently builds on this perspective by stating that the monitoring role of shareholders is to include careful scrutiny environmental and social aspects and policies. (preamble and best practice 1)

Eumedion participants take aspects relating to environmental and social policy and to governance into account in their policies on the exercise of their shareholder rights, which may include entering into dialogue with listed companies and other engagement activities. (best practice 9)

Furthermore Eumedion states: “By applying the best practices, Eumedion participants also demonstrate that they are conscious of the greater responsibility that society expects of both Dutch and non-Dutch institutional investors, because they hold the majority of the shares in the Dutch listed companies and manage other people's money.”

 

If Eumedion participants and other institutional investors will indeed use their influence according to these best practices, company boards will take ESG matters more seriously –and deal with them more explicitly. A dialogue with shareholders has a different taste and weight to it than a for example an NGO intervention. NGO’s are often regarded as a pain in the back, whereas shareholders are appreciated as part of the backbone of a company.  The lever of institutional shareholders will help educating board members not to deal with environmental and social issues as a ‘nice to have’, but as critical success factors for building profitable and meaningful businesses.

Given the increased appreciation of ESG in the investor world I have high hopes –even the expectation- that Eumedion participants will approve the best practices on ESG wholeheartedly. (Consider this to be my contribution to the consultation process).