Making the EU's financial system more sustainable

Submitted by Imogen Allan on 08 July 2021

The European Commission’s new Sustainable Finance Strategy sets out several initiatives to tackle climate change while increasing investment in the EU's transition towards a sustainable economy The strategy will be more inclusive for SMEs.

In recent years, the Commission took action to build the foundations for sustainable finance. Sustainability is a key feature of the EU's recovery strategy and the financial sector will be key in helping to meet the targets set out in the European Green Deal.

The new strategy highlights the EU's leading global position in sustainable finance. To achieve sustainability, the Commission will work with international partners through the International Platform on Sustainable Finance.

Key aims are to:

  • Extend the existing sustainable finance toolbox
  • Improve the inclusiveness of SMEs
  • Improve the resilience of the financial system
  • Increase the contribution of the financial sector to sustainability
  • Monitor the EU’s transition to sustainability
  • Develop international sustainable finance initiatives and standards

To meet these targets, the Commission will actively support Member States.

Speaking of the new strategy, Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Today's Sustainable Finance Strategy is key to generate private finance to reach our climate targets and tackle other environmental challenges. We also want to create sustainable funding opportunities for small and medium-sized companies. We will work with our international partners to deepen cooperation on sustainable finance, as global challenges call for global action. We also propose a Green Bond Standard to fight greenwashing and clearly recognise those bonds that truly represent a sustainable investment.”

By implementing the Sustainable Finance Strategy, the EU ensuring a comprehensive approach to funding the green transition and achieving the goals in the Green Deal.

Read the full press release here.

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