07 December 2022

Opening remarks by Commissioner McGuinness at the ECON-ENVI joint committee meeting: state of play on the remaining technical screening crit

On complication – I think the least complicated part is the process of this engagement. The most complicated part is the Taxonomy.

But, you know, off my script, can I just say that the fact that ECON and ENVI are together on this file speaks volumes.

Because what we're trying to do is no longer keep environmental issues separate: they're now part of the wider economic discussion.

And they're part of the future, rather than, if you like, a separate entity.

And in a way, my work on sustainable finance with you – and I want to thank both Committees and this Parliament for their relentless interest in sustainable finance – will make a huge difference.

The path will not be easy, but I'll come to the path in a moment.

I think the Parliament is a very important institution when it comes to driving change.

We know that the need to transition away from fossil fuels is urgent.

I think this war – this illegal invasion by Russia of Ukraine – and the weaponisation by Putin of energy exports – really accelerates the urgency.

So I don't think there's any question about why and how fast we need to move.

We do need more renewables; we need to use the energy we have much more efficiently; and of course we need to diversify our energy suppliers and supplies, from which we will build our stores for this winter and indeed beyond.

Public investment will not be sufficient – we need a huge amount of private investment.

And the European Green Deal, sustainable finance being part of that, are very relevant in this case.

So we're focusing on consolidation and implementation.

We've developed a wide range of regulatory initiatives over a relatively short period of time.

And what we want to do now is make sure that the sustainable finance framework is consistent across these different initiatives, and that these initiatives are usable for the financial system and businesses generally.

So I have really a few points that I want to run through in my presentation, so:

• The Sustainable Finance Disclosure Regulation,
• ESG ratings
• The Taxonomy,of course, being the core.
• And the new Platform on Sustainable Finance.

If I start with SFDR, so the Sustainable Finance Disclosure Regulation.

It kicked in in March of last year – the first major part of the sustainable finance framework.

This Regulation is intended to be a disclosure regime.

And in practice you know that the market is using SFDR more as a labelling scheme.

Concerns have been raised, including by some in this afternoon's meeting, on how some of the fundamental concepts of SFDR should be understood and applied.

And I am very aware of the fears within the financial sector around legal and reputational risks.

And of course investors, supervisors and civil society are concerned because there is a lack of clarity, this creates opportunities for greenwashing.

So in this vein, we are working to address some of these concerns and early next year we will publish a first set of Q&As to try and bring some clarity on specific points.

And that clarification, with the regulatory technical standards that come into effect in January of next year, so that's very soon, I think those together will address some of the concerns...

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