High-Level Expert Group report charts course to support sustainable finance

The report lays out concrete steps for the financial services industry to support a more sustainable and inclusive economic system in Europe, in line with the EU’s environmental, social and governance (ESG) objectives.

In practice, the Report recommends that the Commission:

• Establish a common sustainability taxonomy by 2020;
• Introduce an omnibus proposal to clarify investor duties and place greater focus on environmental, social and governance factors;
• Develop official EU sustainable finance standards, starting with an official EU Green Bond Standard;
• Launch an EU observatory on sustainable finance;
• Cooperate with key countries to develop ‘Sustainable Finance Compacts’ to promote sustainable finance policy reform at the international level.

The HLEG was established by the Commission at the end of 2016 to prepare a comprehensive blueprint for reforms along the entire investment chain, which would form the basis for a sustainable finance strategy for the EU. This comes on the back of the Paris agreement in December 2015, which invited signatories to leverage green finance to help limit the rise in the global average temperature to ‘well below 2°C’.

AmCham EU members have a strong presence in Europe and remain committed to the Paris Agreement. They will continue to invest in a diverse range of projects that support the transition to a low-carbon economy. Policy-makers should seek to provide a stable and predictable framework protecting continued investment and consistent with industrial policy priorities.

What's next?

As part of its work toward building a Capital Markets Union (CMU), the Commission is expected to come forward in March with a broad Action Plan on sustainable finance, building on the recommendations in the HLEG report, followed by the first in a series of legislative proposals in May.

In the European Parliament, Molly Scott Cato MEP’s draft own-initiative report was tabled earlier this month, and is expected to be adopted by the end of April. In the meantime, EU leaders will discuss sustainable finance at its next Summit in March.

In this busy final year of policy-making before the 2019 election, it is unclear how many of the proposals presented in the HLEG report can be adopted by the Commission – and in turn, by the co-legislators – by the end of its mandate.

As an organisation representing companies in all sectors, AmCham EU is uniquely placed to contribute technical expertise to the legislative process under this Commission and beyond. Following our response to the HLEG’s consultation on its interim report in September 2017, our March plenary meeting will be dedicated to sustainable finance. Our aim is to facilitate an open dialogue between policy-makers and leading industry voices from all sectors of the economy on how to unleash the jobs, growth and investment opportunities offered by sustainable finance.

By Jarrod Birch, Policy Adviser, and Stefano Marmo, Policy Adviser.