The EC demonstrates
continuous commitment to sustainability as the driver of its agenda. The
renewed strategy is a token of these efforts.
The climate emergency is clear to all. Transitioning requires
fundamental change in policies and business practices. The financial
market actors have to integrate sustainability and its risks to support
the transition to a sustainable economy. The coronavirus crisis
demonstrated these considerations’ vital importance. We need to account
for sustainability for a green recovery and to enhance economy’s
resilience. Our green recovery campaign outlines 4 ideas to achieve this objective.
We reiterate the sustainability agenda’s urgency and welcome the EC’s
commitment to make proposals on corporate governance. See below our
considerations on specifics to deliver on sustainable finance.
EU taxonomy
We welcome the EC’s plans to expand the scope and
complete the EU Taxonomy. It is a fundamental tool for sustainable
investments. The EU Taxonomy also introduces obligations for companies
and financial market participants in the Disclosures Delegated Act.
Guidance is needed urgently to help companies, banks and insurance
companies to interpret and implement these rules in a consistent way.
Sustainability disclosures regime and natural capital accounting
The CSRD proposal is a big step towards transforming the
corporate disclosure regime. But it is also necessary to identify,
measure and account for companies’ economic activities external impacts
to achieve a comprehensive disclosures’ regime. We are pleased that the
EC intends to enhance its efforts to engage with stakeholders in order
to develop natural capital standards. (See our contribution to the CSRD debate).
Green bonds
Sustainable finance standards and labels are key to
channel funds towards green projects. We encourage the EC’s intentions
to work on other bond labels such as transitional or
sustainability-bonds to finance the transition. The journey towards a
green economy does not consist of the issuance of green financial
products only.
Also, we trust the EU Green Bond Standard will bring
value to the market and enhance green bond issuance’s consistency and
transparency across the EU. A voluntary standard is a good start but
ultimately a mandatory EU GBS will allow greater consistency in its
application. Independent third-party assurance, including on allocation
and environmental reports, can enhance investors’ confidence. Our publication presents the accountancy profession’s views on building a credible green bond market.
SMEs
We strongly support the EC’s work to make sustainability
work for SMEs. Simplified and proportionate reporting standards will
help to respond to data demands. Fostering SMEs’ access to expert advice
will help them adjust their business models, set up necessary systems
and apply the standards. (See our SME sustainability checklist).
We also welcome the EC’s intention to explore digital
solutions for SMEs’ sustainable transition. Among potential initiatives,
a free-to-use carbon footprint calculator would be beneficial for SMEs
as part of the European Single Electronic Access Portal.