How to make EU finances sustainable
14 July, 2017
The High-Level Expert Group on Sustainable Finance published last Thursday its first report setting out concrete steps to create a financial system that supports sustainable investments, the EU press service reported. The report is part of broader efforts to map out an EU strategy on sustainable finance. The first wave of EU reforms focused on making the financial system more stable and resilient. The Commission is now driving forward efforts to reorient the financial system so that it can support long-term, sustainable growth.
“Mobilising finance from investors oriented to the long-term and from capital markets is vital for the transition to a low-carbon, more resource-efficient and sustainable economy. We know that investments of around €180bn per year are needed to deliver on the EU's ambitious climate and energy goals,” VP Jyrki Katainen said. “Strengthening the EU's global leadership on sustainable finance is one of the main priorities of the Juncker's Commission,” VP Valdis Dombrovskis added.
The report proposes quick action towards a classification system for sustainable assets, a European standard and label for green bonds, fiduciary duty that encompasses sustainability, better disclosure from financial institutions and companies on how sustainability is factored into decision-making and a 'sustainability test' for relevant EU financial legislation. The Commission will now start exploring these recommendations in order to transform them into proposals and directives.
Meanwhile the High-Level Expert Group will continue examining other policy areas, such as integrating sustainability considerations in ratings, improved transparency requirements for listed companies, as well as increasing the level of sustainable investments through stable long-term policy frameworks and a strong pipeline of sustainable projects.