The High-Level Expert Group on Sustainable Finance submits its report to the European Commission

In late 2016, the European Commission announced the members of a High-Level Expert Group (HLEG) on sustainable finance, which was tasked with developing a comprehensive strategy in this field for the European Union.

The group has 20 members from civil society, the financial sector and the academic world. One of these is Philippe Zaouati, CEO of Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investment. Philippe Zaouati is also president of Finance for Tomorrow, an initiative sponsored by Paris EUROPLACE and Paris market participants to promote sustainable finance in France and internationally.

After one year of work, including an interim report in July 2017, the HLEG released its final report on 1 February 2018 (which you can view here). This is the most ambitious roadmap thus far to set up a financial system that is more able to fund and invest in a greener and cleaner economy.

This report contains a series of strategic recommendations for setting up a financial system within the European Union that promotes sustainable investments. It lists ways to bring the financial sector into phase with the real economy, in order to support the transition to an economy that consumes fewer resources and is more circular. The HLEG believes that shifting investment flows towards long-term and sustainable projects will also help enhance the stability of the financial system.

The report includes the following proposals:

• Establish a system for classifying sustainable assets on a European scale, by defining what assets help promote sustainable development;
• Clarify investor obligations for giving due weight to sustainable development (ESG) factors;
• Enhance transparency and reporting by financial establishments and companies on the way in which sustainability issues are taken into account in their decision-making processes, particularly climate-related decisions;
• Create a European label for green investment funds;
• Introduce sustainability into the remit of the European Supervisory Authorities (ESA);
• Draw up a European standard for green bonds.

The next step is the European Commission’s comprehensive Action Plan on sustainable finance, due out on 22 March 2018.