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With ever-growing climate-related protests, concerns and debates, sustainable finance is a truly relevant and challenging matter in today’s political environment. As a result of the green agenda- setting by politicians, tackling climate change has become a fundamental priority. In this regard, the European Commission proposed a Taxonomy Regulation to create a framework for sustainable finance. While EuropeanIssuers supports the Commission’s initial proposal, recent amendments made in the European Parliament by the ECON/ENVI Joint Committee have been a cause of major concern for companies. Therefore, on 6 March 2019, EuropeanIssuers issued a statement to 130 MEPs raising our concerns.
EuropeanIssuers supports the objectives of the Commission’s proposal on the Taxonomy Regulation to further mobilise investments in view of achieving sustainable development, job creation and prosperity. We believe that the Commission’s original proposal can significantly contribute to the objective of mobilising finance towards environmentally beneficial projects and foster cross-border investments by providing a common language for environmentally beneficial investments. However, the direction that the Taxonomy Regulation is taking in the ECON/ENVI Joint Committee is very worrying. Several of the amendments aim at excluding specific sectors from access to sustainable and corporate finance by creating a category of activities “with a significant negative environmental impact”. We strongly oppose such a “brown-listing” approach and support the original scope of the proposal targeting only financial products that are marketed as environmentally sustainable. As there are many companies at different stages of their journey to transition towards low-carbon and sustainable finance activities, it is important to ensure that the Taxonomy Regulation should not exclude entire sectors and activities from access to sustainable finance. Yet the exclusionary approach of the current text in the European Parliament would:
- Run against the objective to move the whole European economy towards sustainability.
- Hamper new industrial investments within the EU.
Therefore, EuropeanIssuers would recommend the ECON/ENVI Joint Committee to:
- Retain the initial scope as designed by the European Commission and therefore remove the definitions of and the references to “degree of environmental impact and sustainability of an economic activity”, “investments having a significantly harmful environmental impact” and “activities with a significant negative environmental impact” and
- Remove the automatic “brown-listing” of economic activities on the basis of a “carbon intensive lock-in effect” or of arbitrary thresholds for power generation activities.
Please find EuropeanIssuers’ statement on the EP Compromise Amendments to the Taxonomy Regulation here.
* EuropeanIssuers represents the interests of companies, including smaller ones, listed on the stock exchanges in Europe. We aim to ensure that EU policy creates an environment in which companies can raise capital through the public markets and can deliver growth over the longer-term. We have a dedicated Smaller Issuers Committee, composed of the national associations representing the interests of smaller listed companies (‘listed SMEs’).
