EU Commission action plan on sustainable finance
In March 2018, the European Commission adopted an action plan on sustainable finance as part of a strategy to integrate environmental, social and governance considerations into its financial policy framework and mobilise finance for sustainable growth. In May 2018, the Commission released the first legislative package under the action plan. The four proposals included in the package are: (1) a unified EU classification system (‘taxonomy’), (2) investors’ duties and disclosures, (3) low-carbon benchmarks, (4) better advice to clients on sustainability. In July 2018, the Commission also established a technical expert group on sustainable finance (TEG) to inform work on the action plan, notably in the development of a classification system for sustainable economic activities, an EU green bond standard, methodologies for low-carbon indices, and metrics for climate-related disclosure.
More information on the work of the TEG can be found here. For an open letter calling on the EU Commission to include human rights expertise in the technical expert group on sustainable finance, to which the Business & Human Rights Resource Centre was also a signatory, see here.
The European Green Deal has announced a Renewed Sustainable Finance Strategy, which aims to ensure that financial systems support the transition towards sustainability in a context of recovery. The renewed strategy will build on the action plan and the work of the TEG. To inform the development of the renewed strategy, the Commission launched a consultation.
The TEG's mandate ends on 30 September 2020. Following the adoption of the Taxonomy Regulation in June 2020, the Commission launched a call for applications for members of the 'Platform on sustainable finance', as set out by the taxonomy. The Platform on sustainable finance is an advisory body, comprising a group of experts who advise the Commission on the technical screening criteria for the EU Taxonomy, among other, as well as on sustainable finance more broadly.
On 28 February 2022, the Platform on sustainable finance published its final report on extending the existing EU taxonomy to include social objectives. This followed a consultation on a draft report in the summer of 2021. The European Commission will review the recommendations and decide whether to go ahead with the project later in 2022.