European Commission unveils new Action Plan on sustainable finance
The European Commission has produced its strategy to make sustainability a key component of the financial sector within Europe for years to come.
It’s thought that nearly €180 billion of new investments are needed each year to achieve the EU’s climate targets of reducing greenhouse gas emissions by 40 percent by 2030. In response, the Commission has been working on a way to direct financial flows to meet this ambitious task.
It recently commissioned a ‘High-Level Expert Group’ to provide advice on how to accelerate this work, which published its recommendations last month.
This week’s Action Plan aims to “connect finance with the specific needs of the European economy to the benefit of the planet and our society”, according to a statement.
Some of the key features of the plan include establishing a “common language” for sustainable finance; creating EU labels for green financial products; enhancing the level of transparency in corporate reporting of climate risks. The full report can be read here.
First Vice-President Frans Timmermans said: "Moving to a greener and more sustainable economy is good for job creation, good for people, and good for the planet. Today we are making sure that the financial system works towards this goal. Our proposals will allow investors and individual citizens to make a positive choice so that their money is used more responsibly and supports sustainability".
Valdis Dombrovskis, Vice-President responsible for financial services said the work was directly inspired by the High-Level Expert Group and that the Commission is targeting “far-reaching reform that could set the global benchmark for sustainable finance”.
Miguel Arias Cañete, Commissioner for Climate Action and Energy added that the Paris Agreement was “a massive investment opportunity” with the hope that the action plan will “help Europe's financial sector position itself as a leading global destination for investments in green technologies”.