A better quantification of social and environmental risks and the contribution of the financial sector to sustainable investments are two elements which the European social financial sector needs to embed, according to an expert group on 'sustainable' finance in its interim report, which was presented on Thursday 13 July.
The experts have made recommendations on the role that certain market actors must play. For instance, they argue the urgent need for financial institutions to practice financial reporting that makes it possible to measure performances in terms of carbon footprint and compliance with social and environmental rights. Banks could be encouraged to assess investments on the basis of their social impact and the capital requirements upon them could evolve to steer investments towards more sustainable projects. Ratings agencies could do more to build sustainability factors into their analyses.
The expert group, which will present its final report at the end of 2017, believes member states must urgently set up an action plan on how they intend to mobilise finance to comply with the commitments made under the Paris Climate Agreement and the energy and climate objectives up to 2030. It calls for the creation of a European system to categorise financial assets on the basis of their sustainability and to develop 'sustainable' financial products. Finally, the EU could even create 'Infrastructure Europe', a dedicated organisation to stimulate the financing of more sustainable projects.
The interim report is available at: http://bit.ly/2vkmrnE. (Original version in French by Mathieu Bion)