EU Parliament raises bar on sustainable finance policies
The European Parliament supported bringing climate risk in finance into the open today, voting in favour of a strong own initiative report on sustainable finance. Today’s plenary vote followed the European Commission’s sustainable finance action plan of March 2018 and the Commission’s first subsequent legislative proposals of 24 May.
Sébastien Godinot, Economist at WWF European Policy Office commented:
“Like the citizens they represent, MEPs want to move further and faster to redirect private finance towards activities which are fully sustainable. Several of their demands - like checking whether financial institutions’ portfolios are aligned with the Paris Agreement - are more ambitious than the Commission’s legislative proposals, which were already a step forward.
“The European Parliament’s bold views on sustainable finance bode well for the upcoming discussions on those proposals. It is now up to the Member States to match this level of ambition!”
The European Parliament’s report includes the following recommendations, which go further than the European Commission’s proposals:
- European Supervisory Authorities should carry out climate scenario analyses to check whether the portfolios of financial institutions are aligned with the Paris Agreement on climate change;
- Institutional investors like pension funds should be required to ask clients and beneficiaries for their environmental and social preferences and take these into account;
- Climate disclosure should be mandatory, building on the recommendations of the Task Force on Climate-related Financial Disclosures.
- Climate disclosure should be required for all retail financial products, such as the saving funds proposed to households and private consumers.
Sébastien Godinot, Economist, WWF European Policy Office
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Sarah Azau, Senior Communications Officer, WWF European Policy Office
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