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European Financial Community Moves to Address Sustainability Challenges

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The European Commission released the interim report of the High-Level Expert Group on Sustainable Finance today.

The report includes an early set of policy recommendations on how to make the financial system more sustainable. It is the first report linked to a policymaking institution to indicate what a comprehensive programme of sustainable finance reform could look like.

The interim report of the High-Level Expert Group on Sustainable Finance (HLEG) includes several early recommendations to mobilise more capital towards sustainable investments. These will help solve important societal challenges, including the creation of jobs, especially for young people, education, retirement finance, tackling inequality, and accelerating the shift to a decarbonised and circular economy.

Currently, the EU is investing far too little in initiatives to avoid dangerous climate change. The report indicates that additional investments of €1.8 trillion are needed to meet the EU’s 2030 climate and energy targets alone.

To address the problem, the HLEG asks for a ‘sustainability test’ to ensure sustainability is integrated into all future EU financial regulation and calls for a ‘Sustainable Infrastructure Europe’ body to be established to match public authorities and their infrastructure plans with private investors.

The HLEG is also tasked with protecting the financial system from environmental risks, including those that stem from climate change. To better manage these risks, the HLEG asks the European Commission to integrate the recent recommendations of the Financial Stability Board’s Task-Force on Climate-related Financial Disclosures.

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Ingrid Holmes, Director of E3G and Member of the High-Level Expert Group said:

Europe has sent a message to the rest of the world that it is at the forefront of delivering a sustainable financial system. Policymakers around the world should take note of the group’s work.

ENDS

Notes to Editors

E3G is an independent climate change think tank operating to accelerate the global transition to a low carbon economy. E3G specializes in climate diplomacy, climate risk, energy policy and climate finance.

In 2016, E3G was ranked the fifth most influential environmental think tank in the world, third in Europe and first in the UK by the Go to Think Tank Index.

HLEG Interim Report: Financing a Sustainable European Economy is available here.

The HLEG will deliver a comprehensive set of policy recommendations in its final report, due at the end of the year, to set out how the EU can design a sustainable financial system.

The European Commission has already committed to start working on elements of the HLEGs work in the mid-term review of its Capital Markets Union initiative. The European Commission has committed to look at the issues of disclosures, the integration of sustainability information in rating methodologies, supervisory processes and the investment mandates of institutional investors and asset managers. It will also decide on how to take forward the final recommendations of the HLEG by Q1 2018.

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