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The Environmental, Social and Governance (ESG) afternoon seminar of 20 June 2014 focused on financial assessment of non-financial information, i.e. extra-financial reporting following amendments to the ‘EU accounting directive’ 2013/34/EU. A presentation by François Passant, Executive Director of Eurosif on ‘Why is the non-financial reporting important for responsible investors?’ addressed the EU accounting directive’s content and the implications of the recent amendments, followed by the Novethic CEO Anne-Catherine Husson-Traoré presenting the Novethic viewpoint on ESG and finally Marc Schublin Director of Strategy and Stakeholder Relations (EIB) presented the EIB point of view on ESG in the context of Corporate Social Responsibility (CSR) within EIB.

The floor was left to open to ESG best practice discussions and exchanges between ELTI members, then a discussion moderated by François Passant & Dominique de Crayencour on the opportunity and content of an ELTI joint contribution to the consultation launched by the European Commission on the achievements, shortcomings and future challenges of the Commission’s activities on Corporate Social Responsibility (CSR).

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L20 Submission Paper

1. L20 welcomes the opportunity to share views with the G20 Investment and Infrastructure Working Group on 4 June 2014 in Singapore. With over USD80tr in assets under management, institutional investors – including pension funds, insurance companies, endowments and sovereign wealth funds – have a key role to play in meeting future infrastructure challenges within the G20 economies and beyond. Currently, only around 1% of their portfolio is invested in infrastructurerelated assets and of this, most is equity investment in advanced economies by a few leading institutions in a few countries (notably Australia and Canada). Relatively little of this is in ‘greenfield’ investments. At the same time, much of the banking sector has reduced lending capacity and public finances managed by governments are under strain.

2. Given the importance of infrastructure in providing for a modern, efficient and productive economy that can deliver an adequate and sustainable standard of living for all citizens, built around good jobs, decent wages and social protection, it is imperative that governments continue to explore ways to facilitate institutional investor long term investment strategies, including infrastructure.

3. The G20 has a leadership role in mobilising investors for infrastructure. At the St Petersburg Summit in November 2013, the G20 endorsed High Level Principles on Long-term Investment by Institutional Investors. It is time for these G20 Principles to be effectively implemented. The G20 should help institutional investors deliver patient, productive and engaged capital in a responsible way, while at the same time shifting away from short-termist and speculative trading behaviour.

There are a number of pre-conditions for this to happen:

  • Making infrastructure financing work for job creation and decent work;
  • Ensuring rule of law for all, not just for foreign investors;
  • Ensuring proper government planning and infrastructure markets;
  • Addressing regulatory and market barriers to infrastructure finance;
  • Ensuring fair and transparent risk sharing arrangement between public and private parties;
  • Promoting leadership by collectively organised retirement plans;
  • Mainstreaming responsible business conduct; and
  • Ensuring accountability and transparency of asset managers and bankers.

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Agenda   Summary   Speaker Biographies

Co-organised by the G20 Australian Presidency and the OECD, and hosted by Singapore Ministry of Finance, this Roundtable on 4 June 2014 brought together government officials and business leaders to discuss steps to boost infrastructure investment, one of the key priorities of the G20 agenda.

Discussions focused on how policy makers and investors can facilitate private sector infrastructure financing, as well as issues related to governance for institutional investors and the accounting treatment for long-term investment. Members of the G20/OECD Task Force on Long Term Investment and G20 Investment & Infrastructure Working Group joined this event as observers.

The OECD-led Task Force on Institutional Investors and Long-Term Financing, is open to G20, FSB, APEC members and relevant international organisations, and works on developing high-level principles intended to help governments facilitate and promote long-term investment by institutional investors, particularly among institutions such as pension funds, insurers and sovereign wealth funds, that typically have long duration liabilities and consequently can consider investments over a long period.

The Singapore G20/OECD Task Force members met to endorse these principles and further develop High-level principles principles on Long-Term Investment Financing by Institutional Investors for consideration at the previous G20 Summits.

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Conference Report

The 7th annual RI Europe event was held in London from 4th to 5th June 2014.

502 delegates over two days participated in high-level debate from some of the leading responsible investment and corporate sustainability figures at the RI Europe 2014 Conference at the The Tower Hotel.

The conference was attended by 500+ delegates and was an enormous success.

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Long-Term Solutions to Finance the Infrastructure Gap

3 June 2014

InterContinental, Singapore

Programme

The financing and implementation of major infrastructure projects in emerging markets is a crucial driver for sustainable economic growth. Yet many key initiatives remain stalled due to a lack of funds, with the availability of credit constrained by tough regulatory reforms, interest rate uncertainty, and persistent concerns over risk and viability. Much more work needs to be done to create a long-term investment environment robust enough to attract the global capital required. 

The fifth annual World Bank-Singapore Infrastructure Finance Summit will focus on the latest policies and innovative solutions being envisaged to boost long-term infrastructure financing and development.

The Summit – organised by the World Bank, the Singapore Ministry of Finance, the Monetary Authority of Singapore and the Financial Times, in association with the World Bank-ASEAN Infrastructure Finance Network, and with support from the Australian Government – has become the leading forum for policy-makers, investors, contractors and strategists to share best practice and new ideas on plugging the infrastructure gap.

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Agenda   Presentations

The OECD-Risklab-APG Workshop on pension fund regulation and long-term investment was held on 7 April 2014 at the Symphony Building, Gustav Mahlerplein 3 in Amsterdam. Discussions focused on:

- Long-term pension investment strategies under risk-based regulation

- Does regulation matter? Riskiness and procyclicality in pension asset allocation

- Regulatory challenges for long-term illiquid assets

Participants included representatives from pension funds, insurance companies, sovereign wealth funds and asset managers as well as officials and experts from ministries of finance, central banks and international organisations.

This Amsterdam OECD/APG workshop fell under the scope of the OECD Project on Institutional Investors and Long-Term Investment and G20-OECD work on long-term financing. ELTI was represented by the Secretary-General Mr. Dominique de Crayencour and other participants included representatives from pension funds, insurance companies, sovereign wealth funds and asset managers as well as officials and experts from ministries of finance, central banks and international organisations.

Discussions focused on long-term pension investment strategies under risk-based regulation, also exploring the question of whether regulation matters. The issues of riskiness and procyclicality in pension asset allocation and the regulatory challenges facing long-term illiquid assets were also discussed at length.

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Programme   Summary   Newsletter

The 'Combining resilience and growth' seminar between 31 March and 1 April 2014, organized by Eurofi in association with the Greek EU Presidency was open to a target audience of public and industry representatives of public and industry representatives from the authorities and financial industries faced with the finance sector's challenges of objectives for growth and financial stability in aiming for an effective European Banking Union.

On this occasion many key regulatory topics and projects on the agenda of the European Commission were discussed in the global context. More specifically, a session was also organized on the priorities of the new European Commission for the finance sector, and the ELTI Secretary-General Mr. Dominique de Crayencour contributed to the discussion.

The aim of this Seminar is to facilitate open and interactive discussions between public decision-makers and leaders of the financial industry on the major on-going reforms in the financial sector.

The challenges posed to the financial sector by growth and financial stability objectives and the project to move towards an effective European Banking Union will be the main focus of the seminar.

Many key regulatory topics and projects on the agenda of the EU Commission will be discussed on this occasion taking into account the global context: the long term financing of the EU economy (financial mechanisms to answer to needs of infrastructure projects as well as those of SMEs and midcaps including proposals to relaunch sound securitisation), E.U. Single Resolution Mechanism, the calibration of banking prudential requirements, Solvency 2 and global insurance regulations, market infrastructure regulations and the recovery and resolution of financial market infrastructures, systemic risk mitigation in the asset management sector, the challenges raised by collateral use and reuse, global consistency and cross-border implementation of financial regulations. A specific session will also be organized on the priorities for the forthcoming EU Commission in the financial area.

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Minutes

Steering Committee seminar on 27 March 2014: Comparing national long-term investment finance-valuation systems between France and Germany.

A Working Group meeting on accounting and reporting standards, held on 18 March 2014 in Brussels, was opened by Philippe Maystadt, special advisor to Michel Barnier, the EU Commissioner for Internal Market and Services, with a presentation on the accounting environment 'Should IFRS standards be more European?'. Nadia Calviño (DG MARKT) was replaced by Mr. Didier Millerot (DG MARKT) who followed up on the European Commission's Long-Term Investment Green Paper.

Internal presentations of new WG members ensued before discussions reopened on the EFRAG Research Paper 'The role of the business model in financial reporting' in preparation for ELTI's WG response, involving an exchange of views, work allocation, and a calendar proposal. Other concluding topics included a study to be ordered by the Commission aiming to take stock and assess the effects of using international financial reporting standards (IFRSs) in the EU. Those results are expected by September 2014.

In February 2014, the LTIC Steering Committee (SC) met in Madrid to review its achievements in 2013 and plan its strategy and work for 2014. Mr. Dominique de Crayencour was appointed as LTIC Secretary-General and the LTIC budget for 2014 was approved.

Talks centred on a mapping exercise to be conducted on the long-term financing of Infrastructure and SMEs, on the financial regulation and on market instruments. Mr. Mikhaïl Gorst (VEB), President of the LTIC Scientific Committee, reported on its work and progress and talks ended with a group discussion on the LTIC Working Groups.

Contact

European Long-Term Investors a.i.s.b.l.
Rue Montoyer 51
B - 1000 Brussels
Belgium
secretariat@eltia.eu