Strategy for Financing the Transition to a Sustainable Economy

Summary:

Communication published by the European Commission on 6 July 2021, setting out a number of initiatives aimed at increasing investment in the transition towards a sustainable economy in the European Union (EU), while also tackling climate change and other environmental challenges.

Further information:

The European Commission published its first Action Plan on financing sustainable growth in 2018. Based on that plan, the European Union (EU) put in place three building blocks for a sustainable framework: a taxonomy of sustainable activities, a disclosure framework for non-financial and financial companies, and investment tools. However, understanding of what is require to meet sustainability goals evolved since then, and the global context changed too. It has thus been deemed necessary to launch a new phase in the EU's sustainable finance strategy.

The strategy presented by this Communication includes six sets of action:

• Extend the existing sustainable finance toolbox to facilitate access to transition finance;
• Improve the inclusiveness of small and medium-sized enterprises (SMEs), and consumers;
• Enhance the resilience of the economic and financial system to sustainability risks;
• Increase the contribution of the financial sector to sustainability;
• Ensure the integrity of the EU financial system and monitor its orderly transition to sustainability;
• Develop international sustainable finance initiatives and standards, and support EU partner countries.

It builds on the 2018 Action Plan, a report published by the Platform on Sustainable Finance and a consultation held in April-July 2020. Its publication aims at achieving the wider goals set by the European Green Deal. The Communication was published on 6 July 2021 alongside a legislative initiative concerning the European Green Bonds.

• Primary Source

News

Deutsche Welle, 06/07/2021: EU reveals new green plan to achieve carbon neutrality https://p.dw.com/p/3w7Hn

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Official

EUR-LEX: SWD(2021)180: Staff Working Document accompanying the Communication https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:180:FIN

European Commission: Consultations: Consultation on the renewed sustainable finance strategy https://ec.europa.eu/info/consultations/finance-2020-sustainable-finance-strategy_en

European Commission: Publications: Strategy for financing the transition to a sustainable economy https://ec.europa.eu/info/publications/210706-sustainable-finance-strategy_en

European Commission: Press Release, 06/07/2021: Commission puts forward new strategy to make the EU's financial system more sustainable and proposes new European Green Bond Standard https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3405

European Commission: Remarks by Executive Vice-President Dombrovskis at the press conference on the New Sustainable Finance Strategy and a European Green Bond Standard (6 July 2021) https://ec.europa.eu/commission/presscorner/detail/en/speech_21_3506

European Commission: Remarks by Commissioner McGuinness at the press conference on the New Sustainable Finance Strategy and a European Green Bond Standard (6 July 2021) https://ec.europa.eu/commission/presscorner/detail/en/speech_21_3522

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