By Vikas Vij — Last year, the European Commission announced it would establish a High Level Expert Group (HLEG)
to advise it on developing a comprehensive EU strategy on sustainable finance. The group was established in December 2016 and comprises 20 members of the public, the finance sector and academia.
Now, this advisory body to the European Commission has released an interim report
, which includes some key recommendations. They include developing a classification system for sustainable assets; establishing a European standard and label for green bonds; and creating a dedicated organization to help channel finance towards infrastructure projects.
The HLEG has also put forward two major imperatives for Europe’s financial system. The first relates to ensuring that ESG factors are at the heart of financial decision-making. The HLEG report assigns it a larger significance, linking it to greater financial stability and improved asset pricing.
The second imperative is to direct more capital towards sustainable and inclusive growth. The report referred to mobilizing capital to help solve society’s key challenges that require long-term finance, such as creating jobs, improving education and retirement finance, tackling inequality, and accelerating the shift to a de-carbonized and resource-efficient economy.
Christian Thimann, chair of the HLEG and group head of strategy, sustainability and public affairs at AXA Group
, presented the interim report at a Eurosif (the European Sustainable Investment Association) roundtable on the day of its release. Thimann said that sustainability is not just ESG, but so much more. It is the vision of an economic model that is sustainable in an economic sense, as well as socially and environmentally.
Flavia Micilotta, executive director of Eurosif said the expert group’s report showed an understanding that there is the need for a fundamental paradigm shift.
The European Commission has already started working on some measures the HLEG mentioned in its report, and may decide on the concrete follow-up to the HLEG recommendations by the end of next year.