A team of experts have set out the recommendations for greening the EU’s financial policies to help unlock investments in meeting climate targets.
The High-Level Expert Group on Sustainable Finance (HLEG) has identified ways in which the financial sector can reconnect with the economy to support the transition to a more resource efficient and circular economy.
Some of its proposals include a classification system or “taxonomy” to provide market clarity on what is sustainable, clarifying the duties of investors and improving disclosure by financial institutions and companies on how sustainability is factored into their decision making.
They also recommend an EU-wide label for green investment funds and a European standard for green bonds.
The report will form the basis of the European Commission’s Action Plan on sustainable finance that it will put forward in the coming weeks.
Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: “The signature of the Paris agreement in 2015 marked a milestone for the world and for the global economy. We are now moving towards a low carbon society, where renewable energy and smart technologies improve our quality of life, spurring job creation and growth, without damaging our planet.
“Finance has a big role to play in funding a sustainable future. I welcome the outstanding work of the HLEG which is excellent input for our upcoming strategy.”