The European Commission has today published its first legislative package under the Action Plan for Financing Sustainable Growth, including four ambitious proposals seeking to integrate sustainability into investment decision-making and mobilise capital for sustainable development.
The package includes:
- A unified EU classification system ('taxonomy')
- Investors' duties and disclosures
- Low-carbon benchmarks
- Better advice to clients on sustainability
Sandrine Dixson-Declève, Senior Associate at E3G said:
The Commission has been quick to act to ensure no time is wasted in the transition to a sustainable economy. The proposals for a taxonomy and low-carbon benchmarks will help provide the necessary market infrastructure to help to re-orient capital flows towards a more sustainable economy. To ensure the taxonomy leads to investments that support the delivery of the EU’s sustainability objectives, it should include the net-zero 2050 goal as a reference point, as set out in the Paris Agreement.
The establishment of the Platform on Sustainable Finance, to accompany the taxonomy, is really needed for the EU to be able to close the €180 billion gap of additional investments required to deliver the its decarbonisation objective by 2030. The Platform’s function to monitor and report regularly on capital flows towards sustainable investment goes hand-in-hand with the EU Budget proposals looking to crowd in private capital and boost investable opportunities, as outlined in relation to InvestEU Programme.
The Commission has also crucially made it clear that integrating sustainability risks into investment decisions is a part of investors’ duties to act in the best interest of beneficiaries and wider society.
Notes to Editors
- The Commission’s legislative proposals on sustainable finance can be found here – ec.europa.eu/info/publications/180524-proposal-sustainable-finance_en
- E3G is an independent global think tank, working to accelerate the transition to a low-carbon economy. E3G specializes in climate diplomacy, climate risk, energy policy and climate finance.
- In 2017, E3G was ranked the 5th top environmental policy think tank for the second year running in the Global Go To Think Tank Index