The beacon of sustainable finance in Europe must not lose its flame

(EurActiv, 14 Feb 2019) One year after the High-Level Expert Group on Sustainable Finance released its final report, the follow up on its recommendations is lagging somewhat behind, writes Catherine Howarth.

Catherine Howarth is the chief executive at ShareAction, a non-profit organisation working to make the investment system a force for good.

It’s been exactly a year since the HLEG released its Final Report. The long-awaited recommendations were well received and highlighted the critical role of public policy in shifting capital flows to support the ambitions of the Paris Agreement and Agenda 2030.

A few short months later, the European Commission released its Action Plan on Financing Sustainable Growth and soon after released the three legislative proposals that have shaped the progression of work since then, covering the disclosure of sustainability risks, a pan-European taxonomy to classify environmentally friendly activities, and low-carbon benchmarks.

The year since has brought with it tangible progress: the European Parliament is currently discussing amendments to the taxonomy that could see the introduction of stronger human rights safeguards for environmentally-friendly activities, as ShareAction and others have called for, while the final stages of negotiations on the Disclosure Regulation could secure reporting on sustainability risks for mainstream products, not just those in the green niche.

Finally, the same regulation could encourage investors to assess the impact of their activities on communities and the environment, in addition to assessing the financial materiality of sustainability risks.

External link

EurActiv, 14 Feb 2019: The beacon of sustainable finance in Europe must not lose its flame