News

7 July 2021

New Roadmap enhances EU Sustainable Finance Strategy

Accountancy Europe welcomes the European Commission’s (EC) renewed strategy for financing the transition to a sustainable economy. The EC demonstrates continuous commitment to sustainability as the driver of its agenda. The renewed strategy is a token of these efforts.

The climate emergency is clear to all. Transitioning requires fundamental change in policies and business practices. The financial market actors have to integrate sustainability and its risks to support the transition to a sustainable economy. The coronavirus crisis demonstrated these considerations’ vital importance. We need to account for sustainability for a green recovery and to enhance economy’s resilience. Our green recovery campaign outlines 4 ideas to achieve this objective.

We reiterate the sustainability agenda’s urgency and welcome the EC’s commitment to make proposals on corporate governance. See below our considerations on specifics to deliver on sustainable finance.

EU taxonomy

We welcome the EC’s plans to expand the scope and complete the EU Taxonomy. It is a fundamental tool for sustainable investments. The EU Taxonomy also introduces obligations for companies and financial market participants in the Disclosures Delegated Act. Guidance is needed urgently to help companies, banks and insurance companies to interpret and implement these rules in a consistent way.

Sustainability disclosures regime and natural capital accounting

The CSRD proposal is a big step towards transforming the corporate disclosure regime. But it is also necessary to identify, measure and account for companies’ economic activities external impacts to achieve a comprehensive disclosures’ regime. We are pleased that the EC intends to enhance its efforts to engage with stakeholders in order to develop natural capital standards. (See our contribution to the CSRD debate).

Green bonds

Sustainable finance standards and labels are key to channel funds towards green projects. We encourage the EC’s intentions to work on other bond labels such as transitional or sustainability-bonds to finance the transition. The journey towards a green economy does not consist of the issuance of green financial products only.

Also, we trust the EU Green Bond Standard will bring value to the market and enhance green bond issuance’s consistency and transparency across the EU. A voluntary standard is a good start but ultimately a mandatory EU GBS will allow greater consistency in its application. Independent third-party assurance, including on allocation and environmental reports, can enhance investors’ confidence. Our publication presents the accountancy profession’s views on building a credible green bond market.

SMEs

We strongly support the EC’s work to make sustainability work for SMEs. Simplified and proportionate reporting standards will help to respond to data demands. Fostering SMEs’ access to expert advice will help them adjust their business models, set up necessary systems and apply the standards. (See our SME sustainability checklist).

We also welcome the EC’s intention to explore digital solutions for SMEs’ sustainable transition. Among potential initiatives, a free-to-use carbon footprint calculator would be beneficial for SMEs as part of the European Single Electronic Access Portal.

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