This second quarter 2016 of EU policy was an interesting roller coaster of events which kept us on the edge of our seats in different ways. Panama papers, IORPs decisive last trialogue negotiations which seem to have closed on a positive note for the ESG community, and, of course, Brexit (see below) are some of the main topics that dominated our scene in the past few months.
During the EU Green Week, the European Commission discussed how more sustainable environmental practice can contribute to a more successful economy. This discussion took place while the European Commission looked at environmental policies, and specifically at how the European Fund for Strategic Investments can mobilise finance for green projects. The event sent some powerful signals to European investor’s community ‘that a change of culture is both possible and profitable’ these the words of Commissioner Vella, analysing how to facilitate access to finance specially for SMEs. Supporting the growth of more sustainable investment tools seems to have been a rising trend in recent months, as not only corporates and banks; but also municipalities and pension funds, have issued new Green Bonds.
All this activity has prepared the ground for the recent update of the Green Bond Principles through the ICMA. This is expected to add significantly to market transparency and further clarify the process of Green Bond issuer alignment with the GBP. Meanwhile, the market continues to grow exponentially and investors expect it to continue growing ‘into a trillion-dollar behemoth by the next decade’, as the EBRD issued its biggest ever green bond of 650 million dollars. The ‘’State of the Market 2016” report, published by the Climate Bond Initiative estimates an increase of climate bonds by $96 billion on last year’s report, including a total made up of approximately 3,590 bonds. Green bonds were also high on the Commission’s agenda as it organised a stakeholder meeting late last month, convening all the key stakeholders who are collaborating with the Green Bond Principles and the Climate Bond Initiative. Different scenarios and plans were discussed as part of the draft report, prepared by a consultancy consortium for the DG.
Sustainability and long-term investment as part of the Capital Market Union was also the topic that animated the debate on the 1st of June at the Eurosif event, organised with the support of the S&D MEP Zanonato. This first Eurosif event organised at the European Parliament included a very interesting set of panellists, who exchanged opinions on the potential of the CMU to unlock new opportunities for a more sustainable economy on both a social and environmental level. For a more detail report, please click here.
As Eurosif is preparing its 2016 SRI study, positive feedback in the industry comes from France where a new study commissioned by Candriam, reported that over 52% of European financial advisers offer SRI funds today. As we ponder on how to further encourage the European market expansion and building on this encouraging news from France, where the Energy Transition for Green Growth bill passed into law late last year, we dare to ask ourselves and our readers – should this ambitious corporate climate-reporting model go global? In addition, what is the future of a number of policy negotiations in a Brexit context? Climate negotiations risk being more difficult without the British, as they have been among the supporters of an ambitious reform of emission trading and have set themselves important national targets. On the other hand, negotiations could be unlocked on a number of dossiers, for instance renewable energy, where the UK has exerted a deep-rooted scepticism overall. What remains essential is to ensure that the Commission overcomes the initial shock of the new situation and continues to seize the moment to help Europe transition to renewable energy.
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