The European Commission established the EU High-Level Group on Sustainable Finance (HLEG) to help develop an overarching and comprehensive EU roadmap on sustainable finance. It requested advice on how to ‘steer the flow of capital towards sustainable investments; identify steps that financial institutions and supervisors should take to protect the financial system from sustainability risks; and deploy these policies on a pan-European scale.
Given the complexity of the financial system and its policy and regulatory framework, there is no single lever to achieve these ambitions and ‘switch’ the financial system to sustainability. Improving the contribution of the financial system to sustainable and inclusive growth requires a comprehensive review, the identification of areas where changes are needed, and the development of specific recommendations in these areas. That is what the HLEG has sought to deliver.
Overall the HLEG recommendations are:
1. Establish and maintain a common sustainability taxonomy at the EU level
2. Clarify investor duties to better embrace long term horizon and sustainability preferences
3. Upgrade disclosure rules to make sustainability risks fully transparent, starting with climate change
4. Key elements of a retail strategy on sustainable finance: investment advice, ecolabel and SRI minimum standards
5. Develop and implement official European sustainability standards and labels, starting with green bonds
6. Establish Sustainable Infrastructure Europe
7. Governance and Leadership
8. Include sustainability in the supervisory mandate of the ESAs and extend the horizon of risk monitoring
If you want to read the HLEG report and annexes, they can be found here
If you want to hear discussions on the HLEGs recommendations on Fiduciary duties – listen to RI’s webinar here
If you want to hear discussions on the HLEGs suggestions for Green Banking Incentives – listen to RI’s webinar here
If you want to hear discussions on the HLEGs definitions and taxonomy of how to define Green Finance – listen to RI’s webinar here