29 July 2020

EuropeanIssuers Responded to the European Commission’s Consultation on the Renewed Sustainable Finance Strategy

EuropeanIssuers responds to the consultation on the Renewed Sustainable Finance Strategy on 15 July 2020 launched by the European Commission. The aim of the consultation was to collect the views and opinions of interested parties in order to inform the development of the renewed strategy.

EuropeanIssuers, representing the interests of publicly quoted companies, responded to the consultation on the Renewed Sustainable Finance Strategy on 15 July 2020 launched by the European Commission1. The aim of the consultation was to collect the views and opinions of interested parties in order to inform the development of the renewed strategy.

In its response, EuropeanIssuers focused on four main types of questions addressed, namely cross-cutting questions, corporate governance, corporate reporting and business financing. In addition to the response to the consultation, EuropeanIssuers attached a cover letter responding to several questions which deemed further clarification.

In relation to the further action to be taken in the area under the cross-cutting questions, EuropeanIssuers stressed the importance of clarifying the definition of enabling and transitioning activities under the Taxonomy Regulation in the level two measures, as this is the key to reaching the sustainability goals in the EU and possibly at global level. In addition, looking at the mainstreaming sustainability in the financial sector over the coming 10 years, EuropeanIssuers identified the main challenges as being the setting up of meaningful standards at worldwide level while avoiding oversimplification, encouraging dialogue between investors and companies with the aim of speeding up the launch of new projects with significant impact on sustainability, and striking the balance between regulatory intervention and market driven solutions.

Furthermore, EuropeanIssuers emphasized the necessity to involve companies from different sectors of the economy in the governance bodies to sustainable finance at EU level, and to avoid uncoordinated initiatives. Such involvement should be fully coordinated at the international level of every possible action, in order to strengthen and encourage sustainable investment globally. Moreover, EuropeanIssuers identified the lack of centralised register on ESG data categorised industry and the asymmetric composition of the EU Member States’ business sectors as some of the barriers and inefficiencies faced by the EU financial system preventing the uptake of sustainable investments.

Regarding governance matters, EuropeanIssuers stated its position in having the role of activist investors tackled, as it may be sometimes the driver of undue short-termism.

In relation to the supply chain due diligence application, EuropeanIssuers indicated that the obligations should be based on a sectorial and specific risk analysis, as the process is burdensome, time-consuming.
EuropeanIssuers confirmed its support for the creation of an European standard for non-financial reporting, provided that it is developed in close cooperation with companies with the aim of collecting harmonised data, therefore saving time and money for companies, having a flexible structure, thus allowing adaptations to the evolving ESG data, and that should not serve as a gateway to digitalisation of ESG data.

EuropeanIssuers Secretary General Florence Bindelle expressed: “We firmly believe that the implementation of the EU Sustainable Finance Strategy needs to rely on the accessibility, at reasonable cost, of such data according to EU definitions, values and convictions. This is particularly relevant since we perceive the availability of qualitative, comparable and reliable ESG data as an issue of European sovereignty, in light of recent acquisitions of major European non-financial rating agencies by the US.”

Finally EuropeanIssuers underlined the importance to align NFRD, Disclosure and Taxonomy Regulations, as well as their delegated acts, in order to avoid incoherence, diverging interpretations or duplication of disclosures for companies.

EuropeanIssuers looks forward to the further legislative actions that the European Commission will take in the framework of sustainable finance, and commits to contributing to the developments of initiatives that work for companies, investors and the overall EU.

European Issuers

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