EFAMA, representing the European investment management industry, today reiterated its 'full support' to the objectives of the EU Green Deal and the Paris Agreement.
EFAMA said the European Commission's initiative for a Renewed Sustainable Finance Strategy comes at a time of unprecedented environmental, economic and social challenges.
In the face of accelerating climate change and the ongoing pandemic, European institutions and the financial sector share the urge for ambitious and effective policies to promote sustainable growth and an inclusive economic recovery, EFAMA asserted.
It is essential that financial advisers take all necessary steps to ensure that retail investors are asked about their sustainability preferences in a straightforward and suitable way."
EFAMA members are committed to play their role to help achieving the Commission's objective of channelling at least €1 trillion towards sustainability-related investments over the next decade.
The 2018 Action Plan on Financing Sustainable Growth already set solid foundations for a framework that integrates sustainability in investment decisions. As many legislative proposals were developed in parallel, some inconsistencies and gaps have emerged.
The renewed European Commission's strategy should aim at putting together the different pieces of the regulatory puzzle (EU taxonomy, SFDR, sustainable benchmarks, integration of sustainability considerations in UCITS, AIFMD, MiFID II, EU Ecolabels, etc.) to make the new rules work in practice in a well-sequenced, consistent and coordinated manner.
"While we recognise potential benefits in a system that identifies harmful activities, once properly implemented, the ‘Do No Significant Harm' criteria of the EU Taxonomy Regulation will de facto fulfil this purpose. We therefore question the need to develop a separate and exhaustive list of brown activities as currently suggested by the Commission. This would increase complexity to an already complex sustainable finance framework," commented EFAMA's director-general, Tanguy van de Werve.
EFAMA favours the establishment of a clear EU-wide trajectory on greenhouse gas emission reductions. Such transition pathways for each economic sector would allow for concrete assessments of investee companies' progress towards the Paris Agreement objectives and effectively mobilise transition investments.
EFAMA also fully supports the objective of further promoting sustainable investments, including towards retail investors.
"Recognising the urgent need of further promoting sustainable investments, and mindful of asset managers' fiduciary duty, it is essential that financial advisers take all necessary steps to ensure that retail investors are asked about their sustainability preferences in a straightforward and suitable way", added van de Werve.