{"id":3822,"date":"2017-08-01T15:07:08","date_gmt":"2017-08-01T15:07:08","guid":{"rendered":"http:\/\/www.tuk.or.id\/european-expert-group-on-sustainable-finance-calls-for-feedback\/"},"modified":"2018-12-28T16:43:09","modified_gmt":"2018-12-28T16:43:09","slug":"european-expert-group-on-sustainable-finance-calls-for-feedback","status":"publish","type":"post","link":"https:\/\/www.tuk.or.id\/en\/2017\/08\/european-expert-group-on-sustainable-finance-calls-for-feedback\/","title":{"rendered":"European expert group on sustainable finance calls for feedback"},"content":{"rendered":"

Since January 2017, a High-Level Expert Group on Sustainable Finance<\/a> (HLEG) has been at work to provide operational and concrete recommendations to the European Commission (EC) for a comprehensive EU strategy to ensure that finance contributes to long-term social, environmental and economic sustainability. The HLEG published an interim report in mid-July 2017<\/a>, which was presented at a public hearing<\/a> in Brussels on 18 July 2017. Comments on the interim report can be provided by responding to a consultation questionnaire<\/a> by 20 September 2017. The final HLEG report is expected at the end of December 2017. The EC has already stated that it will consider the final recommendations in the first quarter of 2018.
\nThe HLEG group was created as part of the Capital Markets Union (CMU) policy of the EU, and results from the urgent need to deal with climate change by investing in clean energy (at least \u20ac 180 billion a year in the EU is needed) and infrastructure. Members<\/a> are from different parts of the investment sector, as well as one bank representative, an academic and a few NGOs, including SOMO.
\nA major focus of the report\u2019s interim recommendations concern climate or \u201cgreen\u201d investments by fund and asset managers, insurance companies and pension funds, through more obligations for responsible investment (\u201cfiduciary duty\u201d), through financial products such as green bonds that are better defined than is currently the case, or through labelled funds that are also available to individuals. Nevertheless, banks are recognised as having the largest asset pool, which can play an essential role in the transition towards a sustainable financial system. However, it has not yet been defined whether this should be done by easing capital requirements for banks which provide green loans or by penalising credit to \u201cbrown\u201d activities through higher capital requirements.
\nAn important issue for the HLEG is to move financial decisions away from short termism to longer-term impacts, which are often not apparent within the investment timespan. The HLEG recognises the fact that longer-term impacts such as climate change can cause financial instability when they result in the devaluation of assets or financial services (e.g. more frequent and violent storms will affect housing, businesses and agricultural operations to which banks have lent or in which investments were made).
\nThe HLEG often refers to \u201cESG\u201d (social, environmental and governance) aspects, but does not provide a definition. It distinguishes between finance for climate, the environment (together with climate, defined as \u201cgreen\u201d), and \u201csustainable\u201d finance when combining social and governance aspects with \u201cgreen\u201d aspects.  The interim report does not incorporate the EU\u2019s commitment to the UN\u2019s Sustainable Development Goals (SDGs), nor does it make concrete recommendations on how to promote the social needs of European society, such as job creation, reducing inequality and quality education for all.
\nIn its interim report, the HLEG provisional first stage recommendations to the EC are to:<\/p>\n