EUROPE - The European Fund and Asset Management Association (EFAMA) has published two own-initiative reports: 'the EFAMA Code for External Governance' and 'the EFAMA Report on Responsible Investment'.

The EFAMA code for External Governance aims at providing a framework of high-level principles and best practice recommendations to ensure more confidence in European capital markets.

These principles and recommendations are expected to act as a catalyst for engagement between investment management companies and the companies in which they invest.

EFAMA said adherence to this code would support interaction between investment managers and investee companies and ensure a strong link between governance and the investment process.

The association also said the code for Responsible Investment (RI) was an important feature of the investment management industry, with increasing investor demand in many markets.

After having analysed the developments in member states, EFAMA concludes that when an investment management company provides RI products, it should commit to an adequate amount of transparency regarding its processes so that investors are able to evaluate and compare how the product meets the RI requirements.

It said: "Increased transparency of client reporting, communication of investment approaches and selection methods would help investors distinguish between different RI offerings and allow them to make more informed decisions.

"This would be facilitated by European industry guidance on transparency."