(Thursday 26th October) Today, a group of over 20 NGOs coordinated by ShareAction through the European Responsible Investment Network (ERIN), has published a manifesto for the EU elections calling on policymakers to make sustainable finance a top priority of the 2024-2029 EU agenda.
The NGOs, which work on finance, human rights and the environment, represent supporters across multiple member states, warn that a failure to legislate sufficiently ambitious policy risks creating dangerous economic instability.
The new Commission appointed for 2024 until 2029 will have the last opportunity to take action and bring forward legislation to accelerate the transition to a zero-carbon economy and meet crucial 2030 targets set out in the Paris Climate Agreement and Sustainable Development Goals.
Maria van der Heide, Head of EU Policy at ShareAction, said: “Banks, insurance companies, and investors continue to finance activities that deepen the climate crisis, violate human rights, and harm nature.
“Although European Union institutions and governments have introduced some sustainable finance regulation in recent years, it falls short of what is needed to support businesses to transition to a sustainable economy and protect people and planet. We need to see bold action from EU policymakers to ensure that the financial sector powers solutions, not problems.”
“People across Europe expect policymakers to ensure a safe future for them and their families. The incoming European Commission should put ambitious sustainable finance measures at the heart of its agenda, to accelerate the transition to a resilient zero-carbon economy that protects the whole of society.”
The NGOs’ key sustainable finance policy recommendations for the next European Commission include:
Expand the current taxonomy framework to accelerate investments in Europe’s inclusive transition to a zero-carbon economy: create new definitions which define business activities that are harmful, those that contribute to the transition, and those that are socially sustainable.
Account for the risks of harmful investments: bring forward legislation to increase the amount of capital banks and insurers must hold relative to their fossil fuel investments to price in climate related risks. This prevents taxpayers or governments from having to pay the bill for lost investments in fossil fuel activities that become redundant as the economy transitions.
End green and social washing: develop minimum mandatory criteria for what constitutes a sustainable investment product to tackle greenwashing and misleading claims.
The NGOs say that introducing these measures, and others set out in ‘Financing the Future We Want: Our agenda for a sustainable and inclusive EU financial sector’, will push the financial sector to reorient its investments in the right direction and tackle climate change instead of fuelling it. To be effective, they will need to be accompanied by strong enforcement systems to ensure compliance across the EU. Comprehensive policies to regulate the economy and deploy public finance will also be needed drive systemic economic and social change.
Over three quarters of Europeans are seriously concerned by climate change, and a majority think that the transition to a green economy should be sped up, according to polling from Eurobarometer from July.
Notes to editors
The full policy recommendations included in the manifesto are available here: ‘Financing the Future We Want: Our agenda for a sustainable and inclusive EU financial sector’.
This was jointly developed and endorsed by the following NGOs: Ansvarlig Fremtid, BankTrack, BETTER FINANCE, Both ENDS, Bürgerbewegung Finanzwende, Ekō, E3G, European Federation of Ethical and Alternative Banks and Financiers (FEBEA), Facing Finance e.V., Fair Finance International, Finance Watch, Frank Bold, Global Witness, Milieudefensie – Friends of the Earth Netherlands, PAX, Positive Money Europe, ShareAction, Swedwatch, Transport & Environment, Urgewald and WWF European Policy Office.
The European Responsible Investment Network, coordinated by ShareAction, aims to strengthen the voice of European civil society, by working together to improve accountability and investment practices, and to mobilise the power of investors to promote sustainable corporate conduct. We take a collaborative approach to capital markets campaigning, jointly building a fair and responsible investment system.
ShareAction is an NGO working to shape a world where the financial system serves our planet and its people. We mobilise global investors to use their influence to drive up labour standards, tackle climate change, protect the natural world, and improve people’s health. We push policymakers to ensure the financial system is working in the best interests of society. We work with people to create a movement for change. Visit shareaction.org or follow us @ShareAction to find out more.
