Bankers Association welcomes EU Sustainability Taxonomy
The coronavirus has been dominating the headlines for weeks. Drastic emergency measures are being taken, and no end is in sight. The coronavirus demands our full attention in the short to medium term. In the long term, however, the fight against climate change is essential for the future of our children and grandchildren. Even during the current situation, it must not be allowed to take a back seat or become a lesser priority.
Two positive things can be gleaned from the current health crisis: Firstly, it will further accelerate the change in social values already underway towards greater sustainability, security, and stability. Secondly, the world has come together again. Everyone is pulling in the same direction, because we all know that we can defeat the virus only if we work together.
This is exactly the spirit we must also display in transforming the economy and society towards greater sustainability. It takes everyone – countries, companies, and each individual. The Paris Agreement on climate change and the Sustainable Development Goals (SDGs) of 2015 were important first steps. Now other steps are following. For once, it is not the United States that is setting the pace, but rather Europe. Ursula von der Leyen, the new President of the European Commission, has presented an ambitious plan with her Green Deal. But we know that deeds, not words, solve problems. And this is exactly what the European Commission is doing. On 12 March of this year, the technical expert group appointed by the EU presented its final report on a uniform taxonomy as part of its second Stakeholder Dialogue on Sustainable Finance. With this report, the EU aims to set clear guidelines and define comparative measurements for the impact of individual financial investments on the climate. The taxonomy provides for urgently needed transparency and helps to avoid greenwashing.
Sustainable finance has long been an important pillar of the banking centre's strategy. This will continue to be the case, given that the financial industry is crucial for the economy's transition towards more sustainability. We therefore welcome the EU initiative for a uniform taxonomy. Rules like these are absolutely key for ensuring that truly sustainable investments become widespread. A sustainable economy is essential, and at the same time it also pays off for the individual company. For instance, the EU estimates the annual investment gap to achieve the Paris climate targets at EUR 175 to 290 billion. The initial reaction of investors to the coronavirus crisis also shows that sustainable investments are viewed as more crisis-resistant than traditional investments, see chart above and here.
Read more in the guest commentary by Simon Tribelhorn in the 20 March 2020 issue of WirtschaftRegional.
Additional information on the EU Stakeholder Dialogue on Sustainable Finance can be found under the "Europe" heading of our Sustainability topic.