Mirova joins call from European investors to preserve European Green Deal ambition
February 05, 2025
Mirova joins the call coordinated by the Institutional Investors Group on Climate Change (IIGCC), the European Sustainable Investment Forum (Eurosif) and the Principles for Responsible Investment (PRI). This call is supported by 162 investors representing approximately €6.6 trillion in assets under management, as well as 49 service providers and other support organizations, totaling 211 signatures. Together, we call on the European Commission to preserve the integrity and ambition of the EU’s sustainable finance framework, in response to current discussions on “omnibus legislation” to amend key regulations.
The EU Taxonomy1, the Corporate Sustainability Reporting Directive (CSRD)2 and the Corporate Sustainability Due Diligence Directive (CSDDD)3 are fundamental pillars of the EU’s sustainability policy architecture. Together, they help investors manage risk, identify opportunities and ultimately redirect capital towards a more competitive, equitable and prosperous net-zero economy.
Companies and financial market participants need long-term political stability to support their implementation efforts. Recent studies, including those published by the EU’s own sustainable finance platform, show that the increased transparency generated by these regulations is starting to have an impact. We must not lose sight of the results that these regulations aim to support: accelerate investments towards a more competitive and sustainable economy, and enable investors and other market players to better manage risks, impacts and opportunities by facilitating access to high-quality, comparable and reliable sustainability data.
Recent debates on environmental, social and governance (ESG) criteria illustrate a growing divide between Europe and the United States. On the one hand, Europe is positioning itself as a stronghold in the fight against climate change, promoting responsible and impactful finance. On the other hand, the United States seems focused on a pragmatic vision, where financial performance takes precedence over ethical considerations. This dichotomy is exacerbated by campaigns by US conservatives against ESG and criticism in Europe of “overregulation.”
However, the reality is more nuanced. The difficulties faced by European industry are not only due to regulations, but also to a liberal logic that has promoted relocation. The Draghi report highlights the need to close an estimated $750 billion to $800 billion annual investment gap, which requires initiatives like CSRD to ensure access to standardized and quality data.
Once fully implemented, the CSRD will ensure that such reports are widely available, standardized and applied consistently, filling many of the data gaps often cited by financial market participants as a key barrier to sustainable investment and meeting their own reporting obligations. This is particularly important for many investors and companies that set their own commitments on carbon neutrality and emission reduction targets, and for which consistent and comprehensive frameworks for transition plans are essential. Moreover, the gradual introduction of sector-specific standards, focused on the most material information to inform investment decisions, will further strengthen the EU disclosure framework, providing the necessary guidance to support companies operating in high-impact sectors in their decarbonisation process.
By requiring disclosure on impacts and activities aligned with the EU Taxonomy, the CSRD will enable investors to better identify and evaluate projects and solutions that can have a positive environmental impact. By 2024, European companies will have already reported a total of €440 billion in capital expenditure aligned with Taxonomy, a figure that will continue to grow.
The SDTC complements these disclosure tools with essential opportunities for action and behavior change. It provides a basis for companies to put in place the systems and processes necessary to effectively meet key requirements, including transition plans and emission reduction targets.
“We are at a turning point for sustainable finance. While climate concerns are often put in the background in the face of geopolitical and economic crises, it is imperative that we remain committed to our sustainability goals. Sustainable finance must reinvent itself and adapt to this new landscape, while preserving the fundamental principles that guide our action. Mirova remains determined to support these initiatives and work with all stakeholders to ensure a sustainable and responsible transition”, Mathilde Dufour, Head of Sustainability Research, Mirova.
Reaffirm Mirova’s commitment to transparent and ambitious transition regulation
Mirova supports the overall objective of simplifying and improving the coherence of the EU’s sustainable finance framework. Such revisions can effectively reduce the burden and complexity of reporting, while improving the utility of disclosure requirements and fostering a more consistent approach to transition across the value chain. However, reopening these regulations as a whole risks creating regulatory uncertainty and could ultimately jeopardise the Commission’s objective of redirecting capital in support of the European Green Deal. A more effective approach would be to focus on streamlining technical standards and providing clear guidance for their implementation.
In addition, the proposed legislation will have implications that go beyond targeted initiatives. Transparent information from Taxonomy and CSRD is also needed to meet financial sector requirements, including SFDR4 and MiFID II5 obligations regarding customer sustainability preferences. The Commission must consider the broader effects of the proposals on interconnected legislative frameworks.
Mirova recognizes that these ambitious policies have been implemented quickly and often in parallel, leading to implementation and usability challenges for market participants. Mirova therefore supports targeted actions by the Commission at technical level to provide simplification, clarity and consistency across the framework. Mirova calls on the European Commission to:
- Preserving the fundamental principles and objectives and essential content of the EU CSRD, SDSD and Taxonomy to ensure that they support their intended objectives and maintain regulatory stability.
- Consider the importance of these regulations to facilitate the investment needed to support broader initiatives to drive growth, competitiveness and sustainability, including under the future Clean Industrial Deal
- Streamline requirements and address inconsistencies and implementation issues within technical standards (Level 2), based on feedback from industry practitioners and an impact assessment on the usability and effectiveness of existing disclosures and associated costs. Eurosif’s regulatory roadmap for EU decision-makers, the expectations of IIGCC investors on EU sustainable finance, and the PRI ’s 2030 Political Roadmap provide specific recommendations on how to proceed.
- Facilitate the implementation of these rules by providing business-friendly guidelines, including industry-specific recommendations.
- Ensure interoperability between European Sustainability Reporting Standards (ESRS)6 and relevant international sectoral standards to reduce reporting burdens: International Sustainability Standards Board (ISSB)7,Global Reporting Initiative (GRI)8,Sustainability Accounting Standards Board (SASB9).
- Leverage existing digital and technology solutions to reduce reporting costs and burdens and facilitate greater harmonization and centralization of disclosures.
Mirova strongly believes that regulation must be a catalyst for this transformation, not an obstacle. Together with our partners and the European institutions, we can work towards a transition to a sustainable economy that respects the ambitions of the European Green Deal.