The European Commission has adopted a number of measures to increase its level of ambition on sustainable finance.
First, the new Sustainable Finance Strategy sets out several initiatives to tackle climate change, and other environmental challenges, while increasing investment – and the inclusiveness of small and medium-sized enterprises (SMEs) – in the EU’s transition towards a sustainable economy.
The European Green Bond Standard proposal will create a high-quality voluntary standard for bonds financing sustainable investment. Finally, the Commission adopted a Delegated Act on the information to be disclosed by financial and non-financial companies about how sustainable their activities are, based on Article 8 of the EU Taxonomy.
The Sustainable Finance Strategy includes six sets of actions:
- Extend the existing sustainable finance toolbox to facilitate access to transition finance
- Improve the inclusiveness of small and medium-sized enterprises (SMEs), and consumers, by giving them the right tools and incentives to access transition finance.
- Enhance the resilience of the economic and financial system to sustainability risks
- Increase the contribution of the financial sector to sustainability
- Ensure the integrity of the EU financial system and monitor its orderly transition to sustainability
- Develop international sustainable finance initiatives and standards, and support EU partner countries
The Commission will report on the Strategy’s implementation by the end of 2023 and will actively support Member States in their efforts on sustainable finance.
The Delegated Act supplementing Article 8 of the Taxonomy Regulation specifies the content, methodology and presentation of information to be disclosed by large financial and non-financial companies on the share of their business, investments or lending activities that are aligned with the EU Taxonomy. Non-financial companies will have to disclose the share of their turnover, capital and operational expenditure associated with environmentally sustainable economic activities as defined in the Taxonomy Regulation and the EU Taxonomy Climate Delegated act, formally adopted on 4 June 2021.
First published on www.eciia.eu.