Financial sector supports the green economy transformation

The Finnish financial sector is very pleased that the European Commission, presided by Ursula von der Leyen, has taken a comprehensive approach to the issue of climate change in its Green Deal Communication.

”The new Commission has acknowledged that the ambitious climate agenda requires the efficient utilisation of both financing and investing. As a major lender, investor, asset manager, and bearer of insurance risk, the financial sector is in a key role in global climate action”, says FFI’s Managing Director Piia-Noora Kauppi.

The European Commission’s communication issued on 11 December sets out to transform EU into the first economy where there are no net emissions of greenhouse gases in 2050. On 12 December, EU leaders endorsed the objective and asked the Council to take the work forward.

The European Green Deal is an umbrella framework of projects and measures that apply to many different sectors. They are related, for example, to the development of green technologies, cleaner energy sources and traffic emissions. The first legislative proposals are expected to be published in spring 2020. One of the key reforms is the first European ‘Climate Law’, which will enshrine the 2050 climate neutrality objective in legislation.

“The policies chart the course of sustainable development in Europe until 2050 and thus provide valuable support for long-term investments”, Kauppi says.

The Green Deal communication contains many reforms that are important from the financial sector’s viewpoint.

“We want to contribute to the green economy transformation by giving a push to new sustainable public and private investments. The Commission will present a renewed sustainable finance strategy in 2020 to strengthen the private sector’s involvement. This is a natural continuation of the Juncker Commission’s sustainable finance action plan, which has laid the foundation to the upcoming EU green investment classification and guidelines for environmental impact assessment”, Kauppi comments.

Kauppi adds that Finnish banks, insurers and authorised pension companies have long worked to combat climate change. In 2019, FFI surveyed how its member companies had taken climate change into account in their operations. Of the respondent companies, 87 percent said they had integrated climate change considerations into their investing. Combined, the companies manage property with a total worth of more than €1,000 billion.

The European Commission: European Green Deal