With the European Commission to go public on 23 or 24 May with its initial concrete proposals announced in its action plan on sustainable finance (see EUROPE 11977), the Parliament's rapporteur, Molly Scott Cato (Greens/EFA, UK), met a small group of journalists on Thursday 17 May to take stock of the initial challenges that are emerging.
Two legislative proposals will be tabled: one will set out the principles and scope of the European taxonomy and the other will establish sustainability obligations incumbent on institutional investors and asset managers.
In her report, which for the first time sets Parliament's political course on sustainable finance, the British MEP has set the bar fairly high (see EUROPE 12008).
The hardest thing will be to agree on what should be considered 'sustainable', she explained. Whilst Parliament is making the case for a taxonomy that is flexible and able to change in response to rapid developments, the Commission seems to favour a stricter categorisation.
Despite strong support for the idea of defining what constitutes a green investment, the Parliament finally acted timidly in defining what can never be included in a financial product labelled 'green', she explained. At the moment, only coal is excluded and the forthcoming battle will be fought on other sectors, such as aviation and intensive farming.
Scott Cato also anticipates “massive lobbying”, for instance by the nuclear industry. “In achieving this agenda, political leadership will be incredibly important”, she stressed.
Above all, she hopes that the Commission will mark out a path that is clear to the industry, but also to the next legislature. “We want an orderly transition”, she said.
The expectations of the stakeholders are high as well. On Tuesday, at a conference hosted jointly by the European Bank for Reconstruction and Development (EBRD), the Association of Chartered Certified Accountants and Barclays, attendees expressed their hopes of receiving clear signals.
Although they are looking forward to the new common language on sustainability, they also consider that a broader reform of public policies will be necessary, for instance with incentives to the industry to move towards more sustainable models. (Original version in French by Marion Fontana)