What Changes with the New EU Sustainable Finance Strategy?

The new action plan will boost sustainable finance and green investing, aligning them with the Taxonomy Regulation and implementing a common standard for reporting.
Register to the upcoming events to prepare for the next regulatory changes.
A detailed analysis of the impact of the Strategy has been provided to CSR Europe’s members in the latest number of the EU Issue Insight.

The new “Strategy for Financing the Transition to a Sustainable Economy”, published by the European Commission on July 6th, boosts the potential of sustainable finance by widening the markets for green investments and addressing the issue of greenwashing. The document amends the Sustainable Finance Action Plan (SFAP) released in 2018, which established the building blocks of sustainable finance, namely the EU Taxonomy, clear disclosure requirements for companies and financial institutions, and a series of legislative tools to support the transition to a decarbonised economy, such as benchmarks and green labels.

As the financial sector will play a critical role in Europe’s transition towards carbon neutrality by 2050, the document provides a clear action plan with four key commitments:

Stronger financial support to activities contributing to greenhouse gas (GHG) emissions reduction and that are aligned with the EU Taxonomy.
The establishment of a more inclusive financial system, by facilitating the sustainable financing of SMEs and retail investors, also thanks to the use digital technologies. Reference is made in this context to the implementation of the European Single Access Point (ESAP) - a common online platform collecting all corporate disclosure documents and information, in a unique and readable format.
Increase the financial market’s resilience to climate change risks and environmental degradation while improving its overall contribution to sustainability. To achieve this goal, the European Commission will integrate sustainability risks into credit ratings, banks and insurances’s risk management schemes, and financial reporting. This action mainstreams the adoption of a systemic double materiality approach in financial commitments and risk assessment.
Alignment with a strengthened Sustainable Corporate Governance that will focus on the directors’ duty, financial stewardship, and the development of robust monitoring frameworks, reinforced cooperation, transparency, and greenwashing control mechanisms.

A detailed analysis of the impact of the Strategy on businesses has been provided to CSR Europe’s members in the new number of the EU Issue Insight, released on 1 September 2021.

CSR Europe will also provide practical insights on the changing EU regulatory environment at the following events:

16th September: Atelier pt. 2 - Meeting the Requirements of the EU Taxonomy & Corporate Sustainability Reporting Directive pt.1 (for corporate members only)

11th – 14th October: The European SDG Summit 2021 (open event)

25th November: Webinar - Investor Engagement on the Value of Sustainability (open event)

9th December: Atelier pt.3 - Meeting the requirements of the EU Taxonomy & Corporate Sustainability Reporting Directive pt.2 (for corporate members only)

Together with the new sustainable finance strategy, the Commission also released the proposal for a EU Green Bonds Standard (EUGBS) and the Delegated Act on Article 8 of the European Union Taxonomy Regulation. If approved, the EUGBS will set the benchmark for issuing corporate green bonds at EU level and a compulsory issuance verification by accredited external reviewers. The Delegated Act clarifies instead the timeline for the Taxonomy disclosure requirements, regulates the use of proxies, and defines the obligations for SMEs.

The Commission will report on the Strategy's implementation by the end of 2023.

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