The challenges faced by Europe in achieving the sustainable economic growth needed to escape the current crisis have been well documented. They include the lack of available financing, especially for long-term projects and SMEs; political and regulatory barriers to encourage financing of investments that promote environmental and social sustainability; lack of trust in the financial sector; and excessive short-term behaviour in financial intermediaries.
Eurosif supports the creation of specific legal frameworks and investment vehicles to channel more investments into these projects, as this may make them more attractive to investors.
However, Eurosif contends that the long-term financing of the European economy cannot be decoupled from the environmental and social challenges facing Europe and the world. EU policy initiatives supporting long-term investment must therefore be aligned with smart, sustainable, low-carbon, resource-efficient and inclusive growth. Eurosif argues that, beyond incentivizing private investments into long-term, real economy-related projects, EU policy-makers have the opportunity to address and reassess the core objectives and functioning of financial markets, in order to again place Europe at the forefront of sustainability in all aspects of society including finance.
In this agenda, SRI can play a key role as long-term investors and investors in long-term assets must take into consideration environmental, social and governance (ESG) issues in the management of assets, and align this with the needs and expectations of their beneficiaries.