The renewed strategy is an integral part of the European Green Deal and the European Commission’s efforts to ensure a sustainable and resilient economic recovery following the COVID-19 outbreak.
The Commission believes that the financial sector needs to transition to a sustainable business model and should undergo a large-scale transformation, requiring massive investment as is set out in the Renewed Sustainable Finance Strategy.
In its response, Triodos Bank focusses on three objectives:
- Transparency. For well-informed finance decisions, concise and relevant information regarding both financial performance and impact must be available to all. This has implications for banks’ pillar 3 reporting, for funds’ disclosure, for companies’ efficient reporting (less details, more information), but also for accounting rules.
- Citizens empowerment. Everyone should be able to invest their money in positive impact. Citizens are empowered with uniform cross border protection standards and safe investment funds, which allow them to engage in longer term investments in non-listed sustainable companies, and with information where their money goes when entrusted to banks.
- Incentives. First and foremost, governments must lead by example and no longer finance or support harmful activities and introduce taxes for harmful material like carbon and plastics. Also, there is a fallacy of the horizon in banking rules, which needs to be addressed. At the moment, banks that aim for longer term soundness and resilience are sanctioned. The focus needs to be shifted from pillar 1 short-term risk to pillar 4 resilience assessments in various longer-term scenarios, and explicit enhancement of sector diversity.
Our entire response can be found here.
Triodos Bank looks forward to contributing to the execution of the Renewed Sustainable Finance Strategy, building on our 40 years’ experience of financing positive change.