The Spanish Banking Association welcomes the progress made by the European Union’s High-Level Expert Group on Sustainable Finance, which has published its final report today. The European Commission established this group in December 2016 to develop a framework to serve as the EU’s roadmap on sustainable finance.
In this context, AEB joins the European Banking Federation (EBF) in calling on the Commission to act swiftly and prepare an action plan that will enable the banking sector to contribute actively to the fight against climate change without undermining financial stability.
The expert group’s recommendations mark a key moment that brings us closer to an international regulatory ecosystem in which banks will be able to play a fundamental role in financing the energy transition toward a carbon-free economy and achieving the objectives set out in the Paris Agreement on climate change.
AEB applauds the recommendations to advance toward a system for standardizing the identification of sustainable assets, an initiative that was already included in the Federation’s response to the expert group’s preliminary report published in July. The need to improve the framework for disclosing non-financial information and the development of common sustainability standards are two other recommendations that also reflect the position of European banking.
Regarding the recommendation to use incentives and disincentives for investments related to carbon emissions, AEB emphasizes that the expert group has not specifically recommended the introduction of a ‘green supporting factor’ but rather asks the Commission to investigate whether such a factor is justified from a risk perspective.
The introduction of the so-called supporting factor should not contribute to unbalancing risks in the financial sector, as it is difficult to create adequate definitions that do not contradict the need to safeguard accuracy in the weighting of banking risks.
As an organization actively involved in promoting financial education, AEB welcomes the expert group’s recognition of the importance of financial education in empowering citizens and connecting them with the financing of the sustainable economy, and recommends that the European Commission take a more active role in this area.
Going forward, AEB will closely monitor the action plan announced by the Commission for mid-March, actively participating in discussions on sustainable finance that will be coordinated within the Federation through the sustainable finance working group, currently chaired by Toni Ballabriga, BBVA’s Global Head of Responsible Business and representative of the European banking sector at UNEP-FI.
