A large group of civil society organisations have today set out their joint vision of what sustainable finance in Europe should look like, ahead of political transitions in the EU.
Nine NGOs and trade unions across Europe, including ShareAction, WWF, Global Witness, and E3G, have drafted a declaration listing their priorities for the year ahead, calling on policy-makers to create a regulatory framework that mainstreams human rights considerations, and encourages investors to measure the impacts of their activities on communities and the environment.
The groups, which also include the European Coalition for Corporate Justice, Frank Bold, the Nordic Financial Unions, UNI Europa Finance and Sustainable Energy, launch their statement in Brussels today at the European Responsible Investment Network (ERIN) conference. They hope to influence the next stage of the EU's Sustainable Finance agenda ahead of the upcoming change of mandate for the Commission following Parliament elections.
The statement praises the Commission for the ambition of its sustainable finance agenda until now, which has led to unprecedented developments in financial services policy. For example, the Commission proposed a law that would force investors to disclose all financially material environmental, social, and governance (ESG) risks.
Its work on the taxonomy (labelling system) for what constitutes a ‘green’ investment is also welcomed by campaigners and has led to positive developments on factoring in the unintended human rights impacts of those green activities.
However, regulation at EU level must now move on to actively seek ‘to shift capital from brown to green’ and enshrine the non-financial impacts of finance on people’s lives.
Eleni Choidas, EU policy manager at ShareAction, says: “With EU Parliamentary elections coming up in May and a new to-do list for the Commission, there has never been a more important time for coordinated civil society efforts across Europe. The EU has a real opportunity to redesign our economy not just to make our capital markets secure for the long term but to make sure our environment and citizens enjoy the same security now and in retirement.”
Rachel Owens, Head of EU Advocacy, Global Witness said: “For decades investors have turned a blind eye to wide spread land grabbing, human rights abuses and deforestation in the developing world without consequence. Decades of damage prove that voluntary measures for Europe’s financial sector are not enough – European governments must regulate now to make good on their claims that they want to stop climate change and protect human rights.”
Filip Gregor, Head of Responsible Companies Section at Frank Bold says "Our research shows that companies are failing to report meaningful information about their impacts on society and the environment. The availability of insightful comparable data from companies is indispensable for making well-informed investment decisions and it is crucial for public authorities and civil society to enforce corporate accountability and monitor corporate responsibility. The EU Non-Financial Reporting Directive needs to be reviewed and clarified in order to establish sufficient legal requirements for corporate sustainability reporting.
Notes to editors:
The European Parliament has adopted the Corporate Sustainability Reporting Directive (CSRD), which clarifies transparency obligations for large companies operating in the EU on their sustainability impacts, risks, and opportunities. Pursuant to the CSRD, companies across all sectors will report against the European Sustainability Reporting Standards, which were developed by the European Financial Reporting Advisory Group (EFRAG), submitted to the European Commission and published on 22 November.
NGOs and civil society groups will only support an ambitious first set of sector-agnostic ESRS that closely builds on the EFRAG drafts adopted last November. They urge the Commission to follow EFRAG’s technical advice alongside 60+ companies and investors worth 651bn USD, and caution against making significant changes at this stage, as this would risk discrediting the process so far and undoing a good compromise.
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