Standards reflect best practices and requirements for sustainability reporting. This, in turn, helps organisations to respond to demands from their stakeholders, investors and regulators. Explore the essential frameworks shaping the future of sustainable finance and reporting.
There are multiple existing and developing sustainable and responsible initiatives, standards and disclosures, projects as well as open consultations in which you can voice your concerns.
Here you will find useful summaries and resources which can help you navigate the different sustainability standards, initiatives, climate-aligned projects, and calls for feedback.
Discover key initiatives driving the transition to a greener economy. These frameworks and strategies aim to align financial activities with sustainability goals, and, as such, promote transparency, accountability, and environmental responsibility in financial and corporate activities.
The Paris Agreement is a landmark international accord that was adopted by nearly every nation in 2015 to address climate change and its negative impacts. The agreement aims to substantially reduce global greenhouse gas emissions in an effort to limit the global temperature increase in this century to 2 degrees Celsius above preindustrial levels, while pursuing the means to limit the increase to 1.5 degrees.
The European Green Deal is a set of policy initiatives proposed by the European Commission in December 2019 to make Europe climate neutral, i.e. to reduce net greenhouse gas emissions to zero by 2050.
Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects. The strategy by the European Commission outlines several areas that can help enhance sustainable investments across the EU.
The platform is a forum for dialogue between policymakers, with the overall aim of increasing the amount of private capital being invested in environmentally sustainable investments. The ultimate objective of the IPSF is to scale up the mobilisation of private capital towards environmentally sustainable investments.
The EU taxonomy for sustainable activities (i.e. “green taxonomy”) is a classification system established to clarify which investments are environmentally sustainable, in the context of the European Green Deal. The aim of the taxonomy is to prevent greenwashing and to help investors make greener choices. The Taxonomy Regulation (complemented by the Sustainable Finance Disclosure Regulation) also requires disclosures of the extent to which a financial product finances activities that are classified as environmentally sustainable (i.e. what has come to be
known as the degree to which a financial product can be considered as taxonomy aligned).
The Sustainable Finance Disclosure Regulation (SFDR) is a European regulation introduced to improve transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by financial market participants. The SFDR introduces disclosure requirements for financial institutions at organisation, service and product level. In addition to complementing the Taxonomy Regulation by requiring disclosures relating to the taxonomy alignment of certain financial products, the SFDR also requires disclosure of other sustainability related information.
The SFDR also categorises financial products according to the degree of sustainability related ambition for that product.
The creation of new benchmarks that consider the carbon footprint of underlying assets is aimed at assisting investors who are looking into sustainable investment products. Also, the disclosure of the different ESG factors in the benchmark statement and the methodology enables market participants to make well-informed choices with the overall objective of protecting consumers and investors through greater transparency.
On 23 February 2022, the Commission adopted a proposal for a Directive on corporate sustainability due diligence. The aim of this Directive is to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance.
The transition to a climate-neutral and sustainable economy by 2050 offers new opportunities for companies and citizens across the EU. Many companies and investors have already embarked on their sustainability journey, as the growing size of sustainable investment testifies. However, companies and investors are also facing challenges in this transition, especially when it comes to complying with new disclosure and reporting requirements.
