Sustainable Finance: Taxonomy and Benchmarks
Subject headingsEconomic and Monetary union and economic and social cohesion
This proposal is part of a broader Commission's initiative on sustainable development. It lays the foundation for an EU framework which puts Environmental, Social and Governance (ESG) considerations at the heart of the financial system to support transforming Europe's economy into a greener, more resilient and circular system. To make investments more sustainable ESG factors should be considered in the investment decision making process to make investments more sustainable, when taking into account gas emissions, resource depletion, or working conditions. This proposal and legislative acts proposed alongside aim at integrating ESG considerations into the investment and advisory process in a consistent manner across sectors. This should ensure that all financial market participants (UCITS management companies, AIFMs, insurance undertakings, IORPs, EuVECA managers and EuSEF managers), insurance distributors or investment advisors, who receive a mandate from their clients or beneficiaries to take investment decisions on their behalf, integrate ESG considerations into their internal processes and inform their clients in this respect. Furthermore, to help investors compare the carbon footprint of investments, the proposals introduce new categories of low carbon and positive carbon impact benchmarks. These proposals, which are mutually reinforcing should facilitate investments in sustainable projects and assets across the EU.
Number of pages19p.