Shareholder rights directive: a step towards sustainable capitalism - Federated Hermes

The Shareholder Rights Directive survey, A step towards sustainable capitalism, conducted with 175 European institutional investors to gauge levels of awareness and readiness for the Directive, reveals that only a staggering 3% are fully prepared to meet their obligations.

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For too long, the majority of the investment community has neglected its fiduciary responsibilities; whilst investors focused on short-term financial returns, most failed to notice the approaching global financial crisis. Alarm bells should have rung across investment houses as increasingly complex financial models, inadequately managed risk taking and inappropriate incentive structures led to poor corporate behaviour and endangered the savings of millions of pensioners.

Hermes believe that the Shareholder Rights Directive is a profound shift for European asset managers and owners compelling all to end the short-termism that has blighted capital markets, credibly integrate ESG and other long term factors in their investment process, and be responsible stewards of investments. 

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