Tag: Sustainability

The SFDR II Proposal: An Overview

A post by Dr. Arnaud Van Caenegem

The European Commission published its proposal for amending the Sustainable Finance Disclosure Regulation (SFDR) on 20 November 2025, accompanied by a Q&A. The proposal also explicitly amends the PRIIPS Regulation and is understood to implicitly “moot” certain provisions of the Taxonomy Regulation that reference the SFDR.

The SFDR has been discussed in a previous post as a disclosure regulation, adopted with the objective to harmonize the provision of sustainability-related information in individual and collective investment activities by financial market participants, financial advisers and financial products. The Commission proposal introduces a second objective: the creation of a harmonized categorization of sustainability-related products.

This post covers the three key proposed changes: a substantial reduction of the obligations for financial market participants, a limitation of the scope to “collective investment”, and a shift from a disclosure to a categorization framework.

Continue reading “The SFDR II Proposal: An Overview”

Shareholder activism and sustainability: why and how do shareholders engage?

Teaser for a lunch seminar on 20 November 2025

In recent years, the corporate world has experienced an increased focus on sustainability. The pressure for climate action and social responsibility is no longer stemming solely from regulators, NGOs or the media. In fact, increasingly the push is coming from shareholders themselves. We have seen institutional investors and activist hedge funds use their shareholder rights to steer companies towards more sustainable business practices.

But how does this so-called ‘shareholder activism’ actually work in the context of sustainability? What motivates shareholders to engage on sustainability topics? And how much influence do they really have over corporate policy in jurisdictions such as Belgium, the Netherlands, the UK, and the US? 

These questions will take centre stage at the upcoming seminar on ‘Shareholder Activism and Sustainability’ organized by the Belgian Centre for Company Law, held on 20 November 2025 from 12-14h at Linklaters’ Brussels office.

The seminar will consist of the following speakers: Tom Vos (Maastricht University, University of Antwerp and Linklaters LLP), Lucia Jeremiašová (Maastricht University), Isabella Ritter (ShareAction), Rients Abma (Eumedion), Thierry L’Homme (Linklaters), Vincent Van Bueren (Gimv) and Florence Bindelle (EuropeanIssuers).

More information and registration can be found here. 

Below, we already give a teaser of the topics that will be covered in the seminar.

What is sustainability-focused shareholder activism?

Shareholder activism is not a novel, nor a recent idea. It refers to shareholders’ attempts to pressure management for changes in corporate policies and governance with the aim of improving firm performance. But in recent years, a new form of shareholder activism has emerged: sustainability-focused shareholder activism (sometimes also called ESG activism) which is focused on improving a company’s social and environmental impact, not (only) its financial performance.

This form of activism differs from ‘external stakeholder activism’ (such as litigation or protests by NGOs, unions, or consumers) because it operates from within the company’s shareholder base. Shareholders use the rights attached to their shares to advocate for change, whether through engagement with management, proposing resolutions at the general meeting, or voting against directors.

At the same time, different types of shareholder activists exist. Hedge funds, institutional investors, NGOs and even retail investors can all be active on sustainability issues. Their motives and methods may differ greatly. Some activists pursue sustainability because they see it as part of long-term financial value creation. Others act on the basis of broader social or environmental considerations, even when these do not align with shareholders’ financial interests.

The result is a complex landscape that blurs the boundaries between profit-driven engagement and purpose-driven advocacy.

Why would shareholders care about sustainability?

The motivations behind sustainable shareholder activism are as diverse as the activists themselves. Three main theoretical explanations for why investors care about corporate sustainability can be distinguished.

  1. Impact on long-term financial performance
    Many institutional investors engage on sustainability issues because they believe these affect long-term financial performance. A company that ignores environmental risks, for instance, might face future compliance- and litigation-related costs or reputational damage. Engagement thus becomes a way to protect portfolio value. However, this theory has limits. Index funds and “quasi-indexers”, which hold shares in nearly all major companies, may lack the financial incentives to monitor individual firms closely. And at some point, improving sustainability and maximising shareholder value may diverge.
  2. The ‘universal owner’ hypothesis
    According to another view, large diversified investors internalise externalities across their portfolios. As climate change and other societal issues may affect the long-term health of the entire economy and financial system, these ‘universal owners’ are motivated to promote sustainability to safeguard the value of their broadly diversified investments.  Thus, they engage for sustainability not because it improves a single firm’s returns, but because it protects their portfolio as a whole. The challenge, as scholars like Tallarita note, is that few portfolios are truly universal in practice.[1]
  3. Responding to investor demand
    Finally, asset managers may act on sustainability because they compete for investors’ capital. Many end-investors increasingly seek responsible management of their investments, and by implementing engagement strategies and robust ESG policies, firms can attract and retain these conscientious clients. Although it is of note to mention that this also raises the risk of “greenwashing” or what Christie calls “rational hypocrisy”: claiming to be committed to sustainability while avoiding costly or robust actions that such a commitment would require.[2]

Empirical evidence supports a nuanced picture. Studies find that institutional ownership is often associated with better environmental and social performance,[3] especially when investors engage collaboratively.[4] However, not all investors act on their words as some ESG funds vote strategically or selectively, supporting sustainability proposals only when their votes are non-decisive.[5]

The bottom line here is that shareholder activism has the potential to drive sustainability, but its effectiveness depends on who the activist is, how coordinated their efforts are and whether their incentives truly align with long-term value creation.

What are the tools of shareholders to influence sustainability?

Shareholder activists have several tools at their disposal to influence sustainability policy internally. These range from dialogue and engagement to formal mechanisms within corporate governance. Below, we touch on four key tools that are increasingly used to influence corporate sustainability agendas:

  1. Public Letters
    Activists may send open letters urging companies to adopt more ambitious climate targets or disclose sustainability information. These letters can attract media attention and signal investor expectations to the market.
  2. Shareholder Proposals
    In many jurisdictions, shareholders can submit proposals for consideration at the general meeting. These give investors a formal channel to put sustainability issues on the agenda at the general meeting. Such proposals are typically non-binding but may be impactful as signals of investor concern, attract attention of other shareholders, and influence board decisions. 
  3. Director Elections 
    Because boards set long-term strategy, electing or removing directors can be one of the most powerful ways to influence sustainability policy. Shareholders can support or oppose candidates of the board based on their sustainability stance, or, in some instances even propose their own alternative candidates. The 2021 Engine No. 1 campaign at ExxonMobil underscores the manner in which even small investors can make a significant impact.
  4. Say-on-Climate Votes
    A newer development, “say-on-climate” votes, allows shareholders to vote on companies’ climate policies. These votes may either be voluntarily offered by companies, proposed by shareholders, required by law or required by a company’s articles of association. Climate votes are becoming more common across jurisdictions and highlight the growing demand for corporate sustainability. 

​​Together, the aforementioned tools form a fast-evolving set of tools for shareholders, shifting the topic of sustainability from the sidelines of annual reports to the centre of corporate governance debates today.

Questions for Debate

The upcoming seminar will not only describe the mechanisms above but also invite discussion on their implications for corporate law and governance. Among the questions to be debated:

  • Will there be an increasing trend of shareholder activism on sustainability?
  • What can boards do to avoid shareholder activism on sustainability? How should they respond?
  • Should shareholders be able to file non-binding proposals on sustainability,?
  • Does current Belgian company law give shareholders sufficient means to influence corporate sustainability strategies?
  • Should Belgium introduce a mandatory “Say on Climate” vote?
  • Should shareholders have (more of) say on corporations’ sustainability policies; or is this best left to the discretion of boards?
  • Finally, will greater accountability to shareholders make companies more sustainable?

The seminar promises a lively exchange between academics, practitioners and policy experts. If you want to join us for this discussion, you can find more information and registration here.

Tom Vos
Assistant professor at Maastricht University, visiting professor at the University of Antwerp, Research Fellow at KU Leuven and attorney at Linklaters LLP

Lucia Jeremiašová
PhD candidate and lecturer at Maastricht University

Ehrin Belic
Student intern at the Institute for Corporate Law, Governance and Innovation Policies, Maastricht University

[1] Roberto Tallarita, “The Limits of Portfolio Primacy”, 76 Vanderbilt Law Review 2:511 (2023).

[2] Anna Christie, “The Agency Costs of Sustainable Capitalism”, 55 University of California, 875 (2021).

[3] Alexander Dyck, Karl V. Lins, Lukas Roth, Hannes F. Wagner, “Do institutional investors drive corporate social responsibility? International evidence” (2019), Journal of Financial Economics, Vol. 131, Issue 3, p. 693-714,

[4] Marco Ceccarelli, Simon Glossner, Mikael Homanen, Daniel Schmidt, “Which institutional investors drive corporate sustainability?” (2021), <http://dx.doi.org/10.2139/ssrn.3988058>.

[5] Roni Michaely, Guillem Ordonez-Calafi, Silvina Rubio, “Mutual Funds’ Strategic Voting on Environmental and Social Issues” (2021), ECGI Finance Working Paper No. 774/2021.

Steward ownership: enkel nobele intenties?

Een post door Sofie Cools en Lisa Bueken (Jan Ronse Instituut, KU Leuven)

1. In 2022 haalde het welbekende outdoormerk Patagonia de krantenkoppen toen oprichter Yvon Chouinard alle aandelen in Patagonia Inc. wegschonk aan een trust en een non-profitorganisatie. Patagonia Perpetual Purpose Trust ontving alle aandelen met stemrecht. De aandelen zonder stemrecht en mét winstrechten gingen naar de non-profit organisatie Holdfast Collective. De trust moet haar stemrechten op de algemene vergadering van Patagonia Inc. uitoefenen in lijn met de waarden van Patagonia Inc. en Holdfast Collective moet de dividenden die ze ontvangt van Patagonia Inc. gebruiken om de klimaatcrisis tegen te gaan. “Earth is now our only shareholder” luidde het. Op deze manier hoopte Yvon Chouinard de missie van Patagonia Inc. op lange termijn veilig te stellen.

2. De nieuwe eigendomsstructuur van Patagonia wordt gezien als een schoolvoorbeeld van steward ownership. Het begrip steward ownership vindt zijn oorsprong in Duitsland, waar het door de Purpose Foundation werd gelanceerd. Sindsdien is de steward ownership-beweging wereldwijd in opmars. In steeds meer landen ontstaan organisaties die het model promoten, zoals Steward-Owned in België. Heel wat literatuur over steward ownership is sterk gebaseerd op publicaties van dergelijke organisaties en daardoor soms een tikkeltje idealistisch. Het doel van deze bijdrage is om het fenomeen met een open blik, maar ook kritisch onder de loep te nemen.

Continue reading “Steward ownership: enkel nobele intenties?”

Duurzaamheid beoordelen kan binnenkort niet langer zonder vergunning

Een post door gastbloggers Chloë De Somviele & Lisa Nelis

Toegang tot kwalitatieve duurzaamheidsdata is al langer een pijnpunt wanneer beleggers rekening willen houden met de ecologische, sociale en governance (ESG) factoren van bedrijven.[1] Correcte informatie over ESG-factoren neemt aan belang toe in de financiële sector om de risico’s en investeringsopportuniteiten ten gevolge van de energietransitie, klimaattransitie en sociale uitdagingen accuraat in rekening te brengen. Bedrijven die ondernemingen op basis van ESG-factoren beoordelen en rangschikken, ook wel ESG-ratingagentschappen genoemd, zijn daarin essentieel maar ook problematisch, aangezien bijvoorbeeld onduidelijk is welke ESG-criteria zij hanteren, welke ESG-criteria zwaarder doorwegen, en hoe ESG-informatie wordt verzameld.  

De Europese Unie regelt reeds bepaalde delen van de beleggingsketen die uitvoerig op deze blog werden besproken, zoals wanneer een economische activiteit ecologisch duurzaam is, over welke duurzaamheidsinformatie bedrijven moeten rapporteren, hoe informatie over duurzaamheid in precontractuele en periodieke documenten van financiële producten moeten worden opgenomen, en hoe in de distributie van financiële instrumenten gevraagd moet worden naar duurzaamheidsvoorkeuren. Uitgevers van ESG-ratings bleven voorlopig buiten schot. Woensdag 24 april keurde het Europees Parlement een compromistekst van februari 2024 goed. Daarmee ligt nu de verordening van toepassing op ESG-ratings ter stemming voor bij de Europese Raad. Hieronder bespreken we de tekst van het akkoord tussen het Europees Parlement en de Raad zoals die door het Parlement werd goedgekeurd.[2]

Continue reading “Duurzaamheid beoordelen kan binnenkort niet langer zonder vergunning”

Corporate Sustainability Reporting Directive: nieuwe stap richting uitgebreidere duurzaamheidsverslaggeving in de EU

Een post door gastbloggers Joris De Wolf en Bert Antonissen (Eubelius)

Inleiding. De Raad van de Europese Unie heeft op 28 november 2022 de Corporate Sustainability Reporting Directive (CSRD) aangenomen. Hiermee is de laatste horde genomen richting meer gedetailleerde duurzaamheidsverslaggeving in de Europese Unie. Door de richtlijn zullen grote Europese ondernemingen, genoteerde Europese ondernemingen en bepaalde niet-Europese groepen in hun jaarverslag uitgebreid moeten rapporteren over duurzaamheidskwesties zoals milieurisico’s, sociale rechten, mensenrechten en governance.

De goedgekeurde tekst is hier raadpleegbaar.

Van NFRD naar CSRD. De Europese Commissie presenteerde in juli 2021 haar Green Deal, een pakket aan maatregelen dat Europa tegen 2050 klimaatneutraal moet maken. In dit kader werd ook een actieplan “Sustainable Finance” opgesteld, dat erop gericht is financiële stromen te kanaliseren naar duurzame investeringen met een minimale impact op klimaat en milieu. Om dit doel te bereiken, is het volgens de Europese Commissie noodzakelijk dat ondernemingen relevante, vergelijkbare en betrouwbare informatie over hun ESG-beleid ter beschikking stellen aan beleggers, kredietverstrekkers, NGO’s en andere belanghebbenden.

Continue reading “Corporate Sustainability Reporting Directive: nieuwe stap richting uitgebreidere duurzaamheidsverslaggeving in de EU”

Shareholder activism in Belgium: boon or curse for sustainable value creation?

A teaser for the conference on 9 June 2022

Shareholder activism used to be rare in Belgium. According to two studies, there were only 9 hedge fund activist engagements in Belgium between 2000 and 2010, and 7 between 2010 and 2018. This is much lower than the number of activist campaigns in the US, even in comparison to the total number of listed companies. However, shareholder activism is said to enter a “golden age” in Europe, with more corporations than ever at risk of activism. A second important trend is the rise of “ESG activism”, where the tools of shareholder activism are used to pursue “ESG” (environmental, social and governance) objectives. Such ESG activism can be pursued because the activist believes that it could contribute to long-term shareholder value, but also from a non-profit perspective. An example of the latter is the “one share ESG activism” campaign against Solvay by the hedge fund Bluebell, which has urged Solvay to stop the discharge into the sea of waste from a soda ash production plant in Italy.

Shareholder activism in Belgium, and especially the recent trend of ESG activism, has not received much attention in Belgian legal scholarship, however. To fill this gap, we (the Federation of Belgian Enterprises (FEB) and the Jean-Pierre Blumberg Chair at the University of Antwerp) have decided to organize a one-day conference on 9 June 2022 to explore the present and future of activism in Belgium. 

Below, I give a small teaser of my introductory presentation.

Continue reading “Shareholder activism in Belgium: boon or curse for sustainable value creation?”

The case of the missing shareholders in the proposed Corporate Sustainability Due Diligence Directive

A post by guest blogger Marleen Och (KU Leuven)

Background

On 23 February 2022, the European Commission published its long-awaited proposal for a new Directive on corporate sustainability due diligence. This proposal is the next phase of an initiative on sustainable corporate governance, which the Commission launched in 2020. The initiative initially pursued several objectives, namely for companies to better manage environmental and human rights aspects in their operations and value chains and to align the companies’ interests with those of its management, shareholders, stakeholders and wider society. These changes would then introduce a shift away from short-term benefits towards long-term sustainable value creation.

Unlike the initiative itself, the proposal is not titled sustainable corporate governance, but corporate sustainability due diligence, illustrating the change in focus the Commission has seemingly undergone since the launch of the process. This post discusses the shift away from corporate governance and in particular the lack of recognition of the role of shareholders and the topic of short-termism.

Continue reading “The case of the missing shareholders in the proposed Corporate Sustainability Due Diligence Directive”

Corporate Sustainability Due Diligence – voorstel Commissie gepubliceerd

Vandaag heeft de Europese Commissie haar langverwachte voorstel inzake Corporate Sustainability Due Diligence gepubliceerd. Met dat voorstel wil de Europese Commissie ondernemingen verplichten het risico op schendingen van mensenrechten en milieuschade in hun waardeketen preventief op te sporen. 

Aan grote ondernemingen of kleinere ondernemingen (met meer dan 250 werknemers) actief in bepaalde risico-sectoren wordt een due diligence verplichting opgelegd. In het bijzonder wordt gewezen op art. 25 van het voorstel, dat betrekking heeft op de zorgvuldigheidsplicht van bestuurders:

‘1. Member States shall ensure that, when fulfilling their duty to act in the best interest of the company, directors of companies referred to in Article 2(1) take into account the consequences of their decisions for sustainability matters, including, where applicable, human rights, climate change and environmental consequences, including in the short,
medium and long term.

2. Member States shall ensure that their laws, regulations and administrative provisions providing for a breach of directors’ duties apply also to the provisions of this Article.’

Dit voorstel zal in de komende maanden het voorwerp van onderhandelingen uitmaken van Europese onderhandelingen. Verwacht wordt dat deze onderhandelingen intens zullen zijn.

Green disclosure rules for the financial services sector become applicable in the EU

A post by guest blogger Arnaud Van Caenegem (KU Leuven)

Financial services providers can no longer communicate at will about sustainability now certain provisions of the Sustainable Finance Disclosure Regulation (SFDR)[1] have become applicable as of 10 March 2021. The SFDR imposes harmonized disclosure obligations on financial services providers to ensure that the sustainability features of their financial products can be better compared by investors. Up until now, sustainability disclosures have often been limited to vague, unsubstantiated and sometimes misleading marketing rhetoric.[2] This blogpost will discuss the transparency obligations of the SFDR that become applicable on 10 March 2021. Continue reading “Green disclosure rules for the financial services sector become applicable in the EU”

Sustainability is no longer in the eye of the beholder: an overview of the Taxonomy Regulation

Funds that took due account of environmental, social and governance (ESG) factors in their investment strategies generally outperformed their conventional counterparts during the Corona pandemic (FT, 3 April 2020). At the same time there is an omnipresent call to align the economic recovery in Europe with the ‘green transition’ (FT, 18 June 2020). In sharp contrast to this emphasis on the importance for investors to take ESG factors on board when making investment decisions stands the uncertainty about the requirements an investment must meet to be actually sustainable.

On 18 June 2020 the European Parliament decided to remedy the lack of clarity by adopting the Taxonomy Regulation[1] which defines an environmentally sustainable economic activity. More specifically, it sets out the broader framework within which the European Commission will have to come up with the technical criteria an economic activity must adhere to in order to be considered environmentally sustainable. This contribution will give an overview of the key changes brought by the Taxonomy Regulation.

The definition of what makes an economic activity sustainable will lie at the center of an emerging legal framework for sustainable finance. Creating  such a legal framework pioneered as a priority in the Action Plan on Building a Capital Markets Union of 2015 and was translated in more concrete policy in the Action Plan: Financing Sustainable Growth of 2018 based on a blueprint designed by the High-Level Expert Group on Sustainable Finance. In particular the latter Action Plan’s goal to reorient capital flows towards sustainable investments justified the adoption of a detailed EU classification system – or taxonomy – to make it clear for investors which activities qualify as ‘green’ or ‘sustainable’.[2] Continue reading “Sustainability is no longer in the eye of the beholder: an overview of the Taxonomy Regulation”

Sustainable Finance

A presentation by Arnaud Van Caenegem, PhD Researcher (KU Leuven)

Two years have passed since the European Commission published its Action Plan: Financing Sustainable Growth to mainstream sustainability into the financial system. A presentation (16′) by Mr. Arnaud Van Caenegem, PhD Researcher (KU Leuven) covers the coming about of the action plan, its objectives and the progress made, with a particular focus on the Taxonomy Regulation and the Regulation on Sustainability-related Disclosures. It also highlights the major implications of the European Green Deal for the financial sector and elaborates on the next steps in its transformation. Continue reading “Sustainable Finance”

Call for proposals: Corporate & Organizational Decision-Making

By: Business & Liability Research Network (Leiden University)

The Business & Liability Research Network (BLRN) – a partnership between the Company Law department and the Business Studies department of the Leiden Law School – is launching its call for proposals for a new book project on the topic of Corporate & Organizational Decision-Making.

The Business & Liability Research Network

BLRN focuses on innovative and multidisciplinary research in the areas of (i) Good Corporate Governance, (ii) Distress & Insolvency and (iii) Future Business Structures. It was launched in 2018 with an opening conference on “Business Resilience”, which proved to be the prelude to a successful first year.

The network offers the possibility to bring together different research areas (legal and business research) as well as practice and the academic world, leading to innovative perspectives on current issues.

BLRN Book Project

The topic of decision-making in corporations and organizations is receiving increased attention due to the impact of technological developments, discussions on corporate governance and practical examples of (inadequate) decision-making processes. In this project, BLRN aims to highlight corporate & organizational decision-making from a multidisciplinary perspective. From both a legal and business perspective, research will be conducted within the sphere of the three research areas of BLRN: (i) Good Corporate Governance, (ii) Distress & Insolvency and (iii) Future Business Structures. This includes, for example, the relationship between corporate governance and entrepreneurship, the way in which various actors should act during insolvency and the impact of technological developments on a company. Continue reading “Call for proposals: Corporate & Organizational Decision-Making”