The proposal for an EU Ecolabel for financial products is part of the European Commission’s broader Action Plan on Financing Sustainable Growth. The goal is to offer investors an effective way to choose financial products that have a positive impact on the environment.
According to Triodos Bank, the Ecolabel will only contribute to the Action Plan when the requirements are meaningful and impactful. In line with the green funds in the Netherlands, Triodos Bank urges to require at least of 70 % of the portfolio to meet the positive Ecolabel criteria, whilst the other 30 % should do no harm to other environmental, social and governance aspects.
Triodos Bank also expresses concern that even if the Ecolabel can provide a clear indication of what economic activities can be considered as environmentally sustainable, different approaches within different financial market participants regarding the same investment/activity may continue to exist. Making use of existing standards and frameworks is important to ensure uniform application across markets and types of financial institutions.
Please find Triodos Bank’s entire response here.
In March, Triodos Bank warned that Europe’s action plan on sustainable finance threatens to derail. Even though we support the idea behind the action plan, we see a risk of greenwashing. Also, the current state of the debate is such that greenhouse gas emissions and other harmful activities could also be considered sustainable. A definition of "harmful" is being postponed for the time being and the social consequences of investments are being ignored.