Financial sector challenges everyone to join climate action 7 Jan 2020 9:29 Laura Sulkava The Finnish financial sector's sustainable development measures aim at limiting climate change at 1.5°C. Finance Finland (FFI) has committed to actions that aim to limit global warming in accordance with the Paris Agreement. This is the fourth sustainable development commitment undertaken by FFI, and its progress will be monitored for the next five years.At the same time, the EU is preparing several pieces of legislation that aim to encourage and steer financial sector activities in a more sustainable direction. One of them is a common classification system or taxonomy for sustainable investment. The taxonomy is a living list which will first include the options that are best for the climate, and in time expand to cover a broader range of environmental factors. ”Use of the taxonomy to support investment decisions is voluntary”, says FFI’s Head of Sustainability Elina Kamppi.FFI and its member companies have put together a reporting model that increases transparency, leaning on guidelines from the international Task Force on Climate-related Financial Disclosures. Kamppi challenges other sectors to also think of their own indicators and measures: “Being at the forefront of climate work is a competitive advantage. Our simple model is easy to apply even by small companies.”Standards for green investment products are about to be launched in the EU financial market. In the future, funds that sufficiently invest in targets compliant with the EU sustainability taxonomy will be eligible to use the EU Ecolabel.“The faster other sectors and industries join in supporting the aim of carbon-neutrality, the easier it will become to find targets for investment.”Investments are aligned with climate considerationsThe financial sector’s biggest impact in terms of the environment comes from the financing decisions it makes. According to a FFI survey, 87% of Finnish financial sector companies have integrated climate change considerations into their investment. For lending companies, this figure was 38 percent.“There is still room for improvement, but compared to the rest of Europe, we are well ahead”, Kamppi says.The proportion of paper invoices sent by banks has gone significantly down and the insurance sector is investing in loss prevention. Over 70% of FFI member companies responded to the survey. Combined, they manage assets with a total worth of more than €1,000 billion.The article was originally published in Finnish on 21 November 2019 in Kauppalehti Optio's Responsibility supplement produced by GSD Nordic.