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Finance Finland FFI > News > The Commission delivers three law proposals to promote sustainable finance

The Commission delivers three law proposals to promote sustainable finance

​The European Commission is taking concrete action to promote sustainable finance. Based on the proposals given by the High-Level Expert Group on Sustainable Finance (HLEG) earlier this year, the Commission first drew up the Action Plan on Sustainable Finance and has now published a handful of law proposals.

The Commission's recently published package included three legislative proposals. The proposal on a unified EU classification system or a sustainability taxonomy determines the assessment of the environmental effects of investments and defines environmentally sustainable investments. The proposal on offering investment products aims to define the sustainability considerations that investment companies must discuss with their clients and integrate into their sales process. The Commission also wants to create two new benchmark categories: one for companies with a low carbon impact and another one for companies with a positive carbon impact.

Many companies will also be obliged to report how they take sustainability into account in their investment activities. This proposal concerns insurers, pension funds and companies that provide supplementary vocational pension insurance.

"The law proposals follow the HLEG's proposals very closely. They also create a solid basis for executing the group's proposals", commends Esko Kivisaari, member of the HLEG and deputy managing director at Finance Finland.

The expert group's proposals aim to steer the Commission's implementation of sustainable finance in a direction that does not add to the financial sector's legislative burden or further complicate regulation.

According to Kivisaari, the measure of the expert group's success is the level to which sustainable finance is integrated into the markets and decision-making in Europe on a permanent basis. Now is the time to move from stabilising the European post-crisis financial system to supporting growth in the long term.

The Commission's press release