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EC Issues Report on Recommendations for Sustainable Financing in EU

ByRegulatory News

January 31, 2018

EC published a report that sets out strategic recommendations for a European financial system that supports sustainable investments. EC welcomes this report by its High-Level Expert Group on Sustainable Finance.

The report maps out challenges and opportunities that the EU faces in developing a sustainable finance policy. It identifies the ways in which the financial sector can re-connect with the real economy to support the transition to a more resource-efficient and more circular economy. The Expert Group argues that reorienting investment flows into long-term, sustainable projects will also improve the stability of the financial system. The report contains the following proposals:

A classification system, or taxonomy, to provide market clarity on what is sustainable

Clarifying the duties of investors toward achieving a more sustainable financial system

Improving disclosure by financial institutions and companies on how sustainability is factored into their decision-making

An EU-wide label for green investment funds

Making sustainability part of the mandates of ESAs

A European standard for green bonds

EC plans to work on finalizing its strategy on sustainable finance, on the basis of the recommendations in this report. Delivering an EU strategy on sustainable finance is a priority action of the EC Capital Markets Union Action Plan, in addition to being a key step toward implementing the historic Paris Agreement and the EU's Agenda for sustainable development. EC will discuss the findings of the report, along with a comprehensive action plan, at a high-level conference in Brussels in March 2018.

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

PRA published a policy statement (PS4/19) that provides feedback on responses to the consultation paper (CP27/18) on adjusting for the reduction of loss absorbency where own fund instruments are taxed on write down under Solvency II.

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.