Building on the 2018 Sustainable Finance Action Plan (SFAP), a renewed sustainable finance strategy is in the making and will provide a roadmap to increase capital flows towards sustainable investment, support actions set out in the European Green Deal and to manage and integrate climate and environmental risks into the financial system. Ahead of the publication, we review the three objectives we see implications for financial institutions from a regulatory point of view.
The objective of the renewed strategy is not fundamentally different from the 2018 SFAP which consisted of ten actions resulting into a far-reaching and expanding regulatory wave. The 2018 SFAP was about establishing the basic conditions 1) to reorient capital flows to a more sustainable economy, 2) mainstream sustainability in risk management and 3) foster transparency. Much has been achieved in last three years. With the upcoming renewed strategy, it may be good to pause for a moment.