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Updated: October 2020
Regulatory actions in the financial sector must prioritize the completion and implementation of the regulation
developed in the 2018 Sustainable Finance Action Plan and what is provided in the EU Green Deal and
the upcoming Renewed Sustainable Finance Strategy. Overlaps and misalignments between regulations as
well as misalignments in implementation deadlines of interdependent regulations should be avoided.
New regulations must be targeted to specific objectives – to address market failures or observed
deficiencies proportionate to the regulatory objective avoid excessive burdens for entities – and must follow
the materiality principle.
The EU legal framework should furthermore promote social aspects of sustainability in banking according to
United Nations Sustainable Development Goals and the European Union should consider the further
development of an EU Taxonomy including social objectives.
To enhance data availability and comparability, ESBG calls on the European Commission to build or support a
central European ESG free-of-cost – or low cost – data register.
The European Union should provide the right incentives to investors to achieve the aim of redirecting economic
flows to finance sustainable projects. EU policymakers should explore how to provide incentives for small
private investors. The role that financial education can play is very important in this context.
Union should support the development of more structured actions in the area of financial literacy and
sustainability to raise awareness and knowledge of sustainable finance among citizens and finance professionals
rather than proving detailed guidance through regulatory intervention.
Although ESBG members recognise the clear need of targeted regulatory intervention to foster the transition
to a climate-neutral economy and reorient investment flows to achieve this objective, we would like to point
out the risks of excessive regulation: The integration of sustainability in the financial sector is, in ESBG’s view, also delayed by the lack of available
data; the costly purchase of non-financial information by data providers; excessive regulation, misalignment
between different legislative and regulatory acts regarding definitions and application deadlines, and too short
The integration of sustainability in the financial sector is, in ESBG’s view, also delayed by the lack of available data; the costly purchase of non-financial information by data providers; excessive regulation, misalignment between different legislative and regulatory acts regarding definitions and application deadlines, and too short application deadlines.
The European Green Deal and the recovery from the economic consequences of the COVID-19
crisis will significantly increase the investment efforts needed across all sectors, meaning that
financing frameworks, both public and private, must support this overall policy direction.
A Renewed Sustainable Finance Strategy aims to provide the policy tools to ensure that the
financial systems genuinely support the transition of businesses towards sustainability in a
context of recovery. The importance of a Renewed Sustainable Finance Strategy is highlighted
through the ongoing COVID-19 crisis, which underscores some of the subtle links and risks
associated with human activity, climate change, and biodiversity loss, as well as the
subsequently critical need to strengthen the sustainability and resilience of our societies and
economies. It will be hugely important that the Renewed Sustainable Finance Strategy is welldesigned, clear and takes into account the considerations of stakeholders, such as savings
and retail banks, whose business model is conscious of the needs of society, for more than
200 years. A smart strategy and appropriate follow-up actions will be of great value.
On 11 December 2019, the Commission presented its EU Green Deal, announcing an ambitious package of
measures for a just and inclusive transition towards achieving climate neutrality by 2050. As the EU moves
towards climate-neutrality and steps up its fight against environmental degradation, the financial and industrial
sectors will undergo a large-scale transformation too. Although the financial sector has already made
considerable progress, its transition, in the opinion of many, is not fast enough to achieve the climate targets
of 2030 and 2050.
Moreover, the COVID-19 pandemic has shown the critical need to strengthen the sustainability and resilience
of our societies and the ways in which our economies function. In the next years, a more sustainable financial
system will be essential to ensure a green recovery from the crisis and support the prevention of other
pandemics in the future.
For all of these reasons, the Green Deal announced a Renewed Sustainable Finance Strategy to be published
at the end of 2020. The renewed strategy will build on the 10 actions put forward in the European Commission’s
initial 2018 Action Plan on Financing Sustainable Growth, which laid down the foundations for channelling
private capital towards sustainable investments, and will shift the focus to the real economy and corporates,
as well as to public authorities and citizens to give everyone the necessary tools to transition from brown to
green. The Renewed Sustainable Finance Strategy will predominantly focus on three areas:
>> Case studies from ESBG members