On 10 February 2021, the European Commission (Commission) published a summary report of the stakeholder consultation on the Renewed Sustainable Finance Strategy.
On 11 December 2019, the Commission adopted its Communication on a European Green Deal (EGD), which significantly increases the EU’s climate action and environmental policy ambitions. However, the financial system as a whole is not yet transitioning fast enough. For these reasons, the EGD announced a Renewed Sustainable Finance Strategy to help channel investment into sustainable projects and activities. The Renewed Sustainable Finance Strategy will be adopted in the first half of 2021. In order to inform the development of the renewed strategy, the Commission organised a stakeholder consultation to collect views and opinions of interested parties. The consultation was open to the public and ran from 8 April 2020 to 15 July 2020. It aimed to gather targeted feedback on how to:
- Strengthen the foundations for sustainable finance by creating an enabling framework to shift the focus of financial and non-financial companies to sustainability and long-term development.
- Increase the opportunities for citizens, financial institutions and corporates to have a positive impact on sustainability.
- Fully manage and integrate climate and environmental risks into financial institutions and the financial system as a whole.
The report now published provides a summary of the responses received to the consultation.
Among other things the report notes that there was strong support for EU action on ESG research and ratings. Also, there was support regarding accounting standards and rules. On this issue, most respondents indicated that they saw further areas in existing financial accounting rules which may hamper recognition and measurement of long-term sustainability risks. Respondents also supported further definitions, standards and labels for sustainable financial assets and financial products. These included:
- EU Green Bond Standard (GBS). Overall, stakeholders indicated that verifiers of EU green bonds should be subject to accreditation or authorisation at an EU level. Most stakeholders perceived it would be challenging for non-European issuers to follow the EU GBS.
- Prospectus and green bonds. Stakeholders indicated that requiring the disclosure of information on green bonds would improve consistency and help tackle greenwashing. Some of the position papers raised the concern that the mandatory disclosure of information may introduce complexity.
- Other labels and standards. Stakeholders supported the introduction of standards or labels for energy efficient mortgages or green loans and an EU label for investment funds. There was support for the supervision of minimum standards for sustainability investment funds by the Commission or European Supervisory Authorities, or introduction of regulated minimum standards in law, and support for an ESG benchmark. However, concerns were raised within several position papers that the introduction of further labels is premature and may introduce bias and limit product diversity.