Participating in a panel on sustainable finance at the 'One Planet' summit in Paris, the European Commissioner for Financial Services, Valdis Dombrovskis, on Tuesday 12 December unveiled the outlines of the action plan to be presented by the Commission in March 2018 to stimulate the market for sustainable financial products.
As well as building the ESG (environmental, social and governance) criteria into the mandate of the three supervisory authorities (EBA, ESMA and EIOPA), which already features in the proposed revision of the supervisory architecture (see EUROPE 11866), the future action plan is also expected to include considerations related to sustainable development and the obligations between asset managers and institutional investors on the one hand and the owners of the funds they manage on the other.
The Commission is also planning to establish reduced capital requirements for banks in order to stimulate green investments and loans, Dombrovskis announced. He said that this would initially be done by reducing the capital requirements of certain climate-friendly investments, such as electric cars.
Creating a European taxonomy is also being looked into. A sustainable finance classification system of this kind would give investors a common definition of sustainable investments that respect the climate and the environment and how they can be made, he explained.
In the longer term, the Commission is also looking into establishing European standards and labels for green bonds and investment funds, to remedy the fragmentation of the market and help products of this kind to take off. Dombrovskis said that these ambitious measures symbolise Europe's ambition to take the lead on sustainable finance.
France and Belgium – forerunners in green bonds
The member states are also making commitments of their own. France has a leadership role in sustainable finance, said the French finance minister, Bruno Le Maire, stressing that the French state was the first to issue green bonds worth €8 billion, followed by a second issuance a few days ago, for €10 billion to finance renewable energies and green products.
Belgium, which intends to follow suit, will launch its first issuance of green bonds next year to pay for several green projects to be strictly selected, Prime Minister Charles Michel announced on the same day.
Throughout the day, commitments came in thick and fast from various players, such as the insurance company AXA, which has pledged to make €12 billion in 'green' investments between now and 2020. (Original version in French by Marion Fontana)