Sustainable Finance High Level Expert Group

posted by ICODA on 21.11.2017 in News  | Leave a comment

The European Commission announced its public hearing on the Action Plan for Sustainable Finance: 22 March 2018, but there is no plan yet, nor a set of recommendations by the wise people in HLEG.

The interim report of July 2017 showed us a promising analysis: Financial markets and their actors suffer from short-termism, which is incompatible with longer term sustainability, and investment mandates are too much focused on financial returns and the like financial ratios, and too little on impact of investments on society.

The draft recommendations were about transparency to create awareness, about taxonomy to create clarity, about supervisors having a dialogue with their banks, insurers and asset managers on the impact of their finance behavior, as well as about a possible “green supoort factor” versus a “brown penalizing factor” (which is something like a carbon tax for banks). Not about the fundamental incentives driving short-termism and financial focus in our system.

By now, a few months later, and as far as outsiders can see, the discussion seems to focus on solving the liquidity-problem of institutional investors, who seek green investment opportunities for their loads of available funding. A consideration of how to achieve the COP21 goals or the wider UN sustainable development goals seems forgotten.

The EBF published a serious and worthwhile analysis, but still pleads for less capital, with a green support factor, without a brown surcharge.

Several NGOs together with values based banks published a set alternatives, new pathways, on social inclusion, holistic pricing and holistic valuation models.

The discussion goes everywhere, so we curiously look forward to the final report announced for December 2017.