“Change of culture” needed in finance to tackle climate change, says European Commission

Business Stories
Typography

Sustainable finance has made huge progress in recent years, but it remains far from fulfilling its potential, and requirement, to be a core function of the financial sector as a whole.

Green bonds, while expected to grow 30 percent this year to reach the $200 billion mark, still only make up an estimated 1 percent of the global bond market.

Within this context there is also the urgent need to direct financial flows to support sustainable development and the global fight against climate change.

Europe has been one of the first markets to recognise just how significant a change this requires, and the European Commission has recently released its ‘Action Plan’ on sustainable finance.

Speaking at a conference in Paris this week, the Commission’s Director of Financial Markets, Ugo Bassi, spoke of the need to embed sustainability into the norms of the financial sector.

“We don’t want to discourage investment…we certainly don’t want to impose on investors…obligations that would go against their primary objective. What we have in mind is to work on transparency, on accountability, on information. We want to inspire a change a culture”, he said.

Mr. Bassi highlighted on more than the one occasion the Commission’s estimate that a minimum of €180 billion a year will be needed to meet the EU’s climate targets of reducing greenhouse gas emissions by 40 percent by 2030.

Private sector companies are seen as largely responsible for filling this “investment gap”, and the Action Plan will show the way towards achieve it. Its objectives include creating a common language of what is green, brown, or black investments; creating EU labels for green financial products; and increasing the climate-related financial disclosures.

“We have to make sure we give the right signals to the investor community”, added Mr. Bassi.

However, the Plan stops short of setting a price on carbon so investors will know what to avoid from the outset, although this hasn’t been ruled out in the future. This measure has been widely discussed within the financial community.

Olivier Rousseau, Executive Director at the French pension fund FRR, responded in favour of the view, stating during the talk that “price is the tool we rely on in a market economy” and so “let’s use the quintessential market tool”.

Advertisement


Read full article on Climate Action News


Translator

SolarQuarter Tweets

Follow Us For Latest Tweets

SolarQuarter SolarQuartersBestCompaniesToWorkFor Congratulations to all the winners! AMPL Cleantech Avaada CleanMax Solar Froni… https://t.co/GJ1Mwz4i5G
Monday, 16 July 2018 11:09
SolarQuarter SolarRoofs Event Now In Jaipur_100+ Installers & Consumers Attending SolarRoofs Rajasthan_Register Now, 20 July 201… https://t.co/qKnqOMDhz6
Saturday, 14 July 2018 03:31
SolarQuarter SolarRoofs Event Now In Jaipur_100+ Installers & Consumers Attending SolarRoofs Rajasthan_Register Now, 20 July 201… https://t.co/CzxDYBBIvP
Friday, 13 July 2018 06:05