Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, Financial Stability, and Financial Services, spoke on the topic “Greening finance for sustainable business.” He highlighted that the Action Plan on sustainable finance will be presented in March next year.
Mr. Dombrovskis stated that a comprehensive Action Plan to lay the foundations for sustainable and green finance to reach its true potential will be presented next year. He noted that the work related to the Action Plan will be in the following three directions:
- First, it will be proposed to integrate sustainability factors into investment mandates. This means these criteria will be reflected in the duties that asset managers and institutional investors have toward those whose money they manage. This would clarify their legal obligation to factor sustainability risks into capital allocation decisions.
- Second, investors need a common language and classification system for what is considered green and sustainable. The goal is to have an EU taxonomy—or a classification system—for sustainable finance. This is a necessary condition for sustainable finance to reach scale. And it would allow to define EU standards and labels for Green Bonds and Green Investment Funds. This would also further allow to address market fragmentation and accelerate green investments by all types of investors.
- Third, European banks play a major role in financing the economy. To incentivize lending, the EP proposes to amend capital charges for banks to boost green investments and loans by introducing a so-called green supporting factor. This could be done at the first stage by lowering capital requirements for certain climate-friendly investments, such as energy-efficient mortgages.
Valdis Dombrovskis of EC concluded that, “To continue this discussion, the Commission will be organizing a high level conference on 22 March next year, focused on the role of financial services in the transition to a sustainable economy. This will also be an occasion to present out Action Plan on Sustainable Finance. I believe it will be another proof of Europe's ambition to take the global lead on sustainable finance.”
Related Link: Speech
Keywords: Europe, EU, Banking, Sustainable Finance, Action Plan, Green Finance, EC
Previous ArticleIMF Reports on the 2017 Article IV Consultation with Canada
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
EIOPA published its risk dashboard based on Solvency II data from the fourth quarter of 2019.
MNB published a statement on loan payments post the announced moratorium, in addition to a set of new questions and answers (Q&A) on supervisory measures and requirements announced amid COVID-19 pandemic.
EBA updated the Single Rulebook question and answer (Q&A) tool for banks.
US Agencies (FDIC, FED, and OCC) published an interim final rule that temporarily revises the supplementary leverage ratio calculation for depository institutions.