Rules on the testing of car emissions should be toughened up to prevent a repeat of the Volkswagen scandal and the destruction of shareholder value which resulted, a group of leading investors has urged European Union policymakers.
In an open letter, the Institutional Investors Group on Climate Change (IIGCC) said it needed reassurance testing was reliable in order to allocate capital to "those entities that are best placed to deliver enduring value to shareholders."
The IIGCC represents 118 European investors with a combined $13 trillion of assets under management, including holdings in the auto sector.
They include BlackRock, Deutsche Asset & Wealth Management (part of Deutsche Bank), Henderson Global Investors, Nordea, Janus Capital and UBS , all shareholders in Volkswagen, according to Thomson Reuters data.
"With respect to the efficacy of the emissions tests, this is vital for investors as they assess how prepared car manufacturers are for emissions limits that are likely to become more stringent in the future," said the letter, signed by Stephanie Pfeifer, chief executive of the IIGCC.
Volkswagen shares languish some 40 percent below their level before U.S. authorities in September exposed its use of devices to cheat tests of health-harming nitrogen oxide emissions, a decline equating to a loss of billions of euros of shareholder value.
The carmaker said earlier this week it had also understated the fuel consumption of about 800,000 vehicles and the European Commission has now written to all 28 EU member countries urging them to widen their investigations into potential breaches of emission tests.
The investors' letter to policymakers including the European Commission and leaders of the 28 EU nations said IIGCC members based investment decisions on official data on regulatory risks and noted its members had lost significantly as a result of Volkswagen's conduct.
As well as demanding more rigorous testing, it called on policymakers to either require national vehicle approval authorities to carry out random on-the-road testing to check for conformity with EU standards, or establish an independent EU-wide authority.