17 February 2023

EBF: AN EU FRAMEWORK FOR FINANCING THE TRANSITION

The EBF proposes a transition finance framework that would enable corporates to align with EU climate objectives, while representing an effective tool to counter the risk of greenwashing.

The proposed transition finance framework would include intermediate performance thresholds (or roadmaps) aligned with science-based sectoral transition pathways, which would be defined at EU level while taking into account developing market initiatives.

The EBF proposes that the European Commission:

• Define, at activity level, which transition pathways should be used for each economic activity per industrial sector with possible national specificities where relevant
• Standardize, at entity level, corporate transition plans (following the structure proposed by EFRAG) providing a common definition not only of transition plans but also of transition pathways and transition roadmaps

Such Guidance at EU level would facilitate effective client engagement accelerating more accurate considerations on transition at both activity and entity level in a clearer and more comparable manner thanks to a common transition finance framework. This would enable the understanding of transition trajectories as well as facilitate the assessment of clients’ progress over time bringing us one step closer to achieving the EU climate objectives.

 

Full paper

EBF

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