“Sustainable Finance” — Megatrend or just Bureaucratic Effort?
The objective is to channel financial sector capital into sustainable growth and mobilize it to address climate change. In addition, sustainability considerations should also contribute to strengthening financial market stability, for example by taking them into account in risk management and capital investment processes.
The three goals are: Realigning capital flows toward a more sustainable economy, embedding sustainability into risk management, and promoting transparency and long-termism. Like a master plan, the EU Commission defines how sustainability considerations are to be incorporated into almost all areas of economic activity over the next few years.
The entire orientation compass of companies close to the capital market will have to realign itself. For example. rating agencies and benchmark providers will also have to incorporate new sustainability considerations into their analyses.
In order to create the basis for uniform action, a common understanding of the term “sustainable” was first standardized by the Taxonomy Regulation (Regulation (EU) 2020/852), which was finally adopted on June 18, 2020. It includes a uniform classification system for determining which activities should be considered environmentally sustainable. Business activities are environmentally sustainable if, for example, they make a significant contribution to achieving an environmental goal or comply with a minimum level of protection in terms of labor and human rights.
The following six categories are considered environmental goals: Climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems.
This is still open so far. Especially since, also with regard to scientific findings, corresponding evidence is certainly not available in every case, so that many questions of doubt will remain. There is comfort in the final requirement for evaluation criteria: These should be easy to apply and defined in such a way as to facilitate verification of their compliance.