High-Level Expert Group Delivers Roadmap for Greener and Cleaner Economy

Date: 02 Feb 2018

“Europe has the opportunity to build the world’s most sustainable financial system”, concludes the final report of the year-long high-level expert group on sustainable finance (HLEG), released on 31 January.

Established by the European Commission’s Finance Directorate (FISMA) in 2016, the HLEG was tasked with drawing up a sustainable finance roadmap, focusing both on the mobilisation of capital for sustainable development as well as the better management of sustainability factors to avoid threats to financial stability. Nick Robins, Co-director of the UN Environment Inquiry, participated in the HLEG process as one of a number of observers.

According to Mr. Robins, “the final report is certainly one of the most comprehensive strategies yet on sustainable finance”. It sets out nearly 30 recommendations for action across the financial system.

The report proposes:

  • a classification system, or ‘taxonomy’, to provide market clarity on what is ‘sustainable’
  • clarifying the duties of investors’ when it comes to achieving a more sustainable financial system
  • improving disclosure by financial institutions and companies on how sustainability is factored into their decision-making
  • an EU-wide label for green investment funds
  • making sustainability part of the mandates of the European Supervisory Authorities (ESAs)
  • a European standard for green bonds.

It also maps out the challenges and opportunities that the EU faces in developing a sustainable finance policy. It identifies ways in which the financial sector can reconnect with the real economy to support the transition to a more resource-efficient and more circular economy. The group argues that reorienting investment flows into long-term, sustainable projects will also improve the stability of the financial system.

The group’s report will form the basis of the Commission’s comprehensive Action Plan on sustainable finance that it will put forward in the coming weeks. Both the findings of the report and the Commission’s Action Plan will be discussed at a high-level conference on 22 March 2018 in Brussels.

Read the report here.