Investors demand binding EU measures to shield from climate risks

(EurActiv, 20 Sep 2019) A growing number of investors are making their decision based on climate risks and sustainability criteria. Although EU lawmakers are working on making the valuation of companies more uniform in the EU taxonomy, financiers want binding measures. EURACTIV Germany reports.

At the Frankfurt School of Finance and Management, investors, entrepreneurs and consultants have started discussions on today’s hottest topic: the climate. In particular, they have been gathering to discuss what the EU Action Plan for Sustainable Finance means for the industry.

For example, it is hoped that EU regulations will be more clear as to what is meant by the term ‘sustainable’, Jan-Menko Grummer, a partner at Ernst & Young, said during the ceremony.

“If we really want to act sustainably fast, in industry and in business, then we need investments to be sustainable. Because that’s fuel in the engine of our society,” he added.

Capitals are always looking for the best hosts. The only question is how to identify the best host.

The financial world is currently faced with the challenge that it is often impossible to assess the ‘greenness’ of one’s own investments. In a large number of cases, too little information is available about the companies in question. Also, there is often insufficient time and experts to comprehensively assess the effects of a project. Establishing uniform standards is, therefore, one of the main objectives of the EU Action Plan.

Lars Röh, attorney at Lindenpartners, warned, however, that there could be the problem that two definitions of sustainable investments could still apply: the definition from the EU’s Taxonomy Regulation or the so-called Regulation on disclosures relating to sustainable investments (Disclosure Regulation). The bar is set higher in the Taxonomy Regulation.

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EurActiv, 20 Sep 2019: Investors demand binding EU measures to shield from climate risks