Dear friends and supporters,
We recently published the draft European Parliament’s own-initiative report on sustainable finance. It stems from the Green rapporteur of the European Parliament, MEP Prof. Molly Scott Cato. We have worked intensively together on this and discussed the central suggestions and demands with the audience of a well-attended public event in Frankfurt/Main before publication.
The aim of the report is to make the financial system more resilient, align it with long-term objectives and direct more investment in sustainable projects. Our commitment to systematically promote green financial markets and financial products is thus bearing fruit. With our ideas, we are now soliciting the support of the other groups in the European Parliament to jointly address ambitious demands to the Commission.
Please, find the draft report following this link:
Fortunately, the discussion about a greener financial system is gaining momentum, especially on the part of legislators and the private sector. A High-Level Expert Group of the European Commission including key industry representatives, non-governmental organisations and academics presented their final report on sustainable finance last week, which shares many of our demands. Now all eyes are on the Commission, whose legislative proposals are expected in March. We hope that the Commission will take up many of our ideas in their legislative package, so that the European financial system can become more crisis-proof and at the same time serve the transition to a more ecological and social economy. Financial stability is also threatened by climate-damaging investments, which can increasingly devalue and become so called „stranded assets“ as climate change advances. The climate crisis can thus turn into a financial crisis. We must reduce this risk by means of transparency and standards for divestment. In this way, also consumers can use their investment decisions to promote the social and ecological transformation of our economy.
With green European greetings,
Our draft report’s central claims:
*EU-label for sustainable financial products:
An EU label for sustainable financial products is particularly important to us. Small investors can hardly inform themselves about all details of their investments, so green financial products must be clearly distinguishable.
*Integration of sustainability factors into fiduciary duties:
The required inclusion of sustainability factors in fiduciary duties would ensure that clients‘ ethical concerns are taken into account in their investment decisions.
* Capital adequacy rules of banks and insurance companies must continue to reflect the demonstrated risk of an investment:
Green investments must not be subsidised by unjustified privileges in the capital requirements of banks and insurance companies. Future investments are not per se less risky than other investments. Capital adequacy rules serve financial stability and are not an instrument of economic stimulus. We therefore demand that capital requirements must continue to be subject to the demonstrable risk of an investment.
*Adaptation of sector legislation in the banking, insurance and asset management sectors and corporate disclosure requirements:
In order to achieve a real change, the sector legislation of the banking, insurance and asset management industries have to be adapted. We also call for mandatory disclosure requirements for companies to be extended to include environmental, social and corporate governance indicators.