New report outlines building blocks required to meet the Paris Climate accord and Sustainable Development Goals
Triodos Bank today presented ideas for necessary conditions to shape sustainable finance in a new report entitled "New Pathways - Building Blocks for a Sustainable Finance Future for Europe." The report serves as input for the High Level Expert Group on Sustainable Finance, currently advising the European Commission on the EU strategy on sustainable finance.
The new report is a collaborative effort between Triodos Bank, the Global Alliance for Banking on Values, Finance Watch and Mission 2020, an initiative launched by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change and architect of the 2015 Paris Agreement.
Proposals highlighted in the report are geared towards the repurposing of finance and maintaining the right balance between economic, social and environmental needs. These proposals include:
- Include EU citizens in the sustainable finance agenda by creating a new regime for European Sustainability Funds available to all.
- Reframe the goal of transparency as one which genuinely invites and enables stakeholders to understand finance, encouraging a focus on managing what matters most.
- Recalibrate the regulatory instruments used to ensure financial stability - in particular capital requirements - so that we take into account a more holistic view of the economy, society and environment upon which financial stability is based.
- Develop a diverse financial ecosystem to grow a sustainable economy, in order to meet the targets of the Paris Climate Agreement and Sustainable Development Goals. Such an ecosystem consists of financial institutions with different business models, investment horizons and risk appetites, regulated by a consistent framework and including every citizen and firm.
- Sustainability as the core value-creation opportunity of the future by promoting sustainable leadership and encouraging training and competency development in managing sustainability at every level of the financial sector.
The report was launched at today's conference 'How can Sustainable Finance Contribute to the Paris Climate Goals?' organised by the Bruegel Institute, a European economic think tank.
Speaking at the event, Peter Blom, CEO of Triodos Bank, said: "To transform the economy for a sustainable future, everyone needs to join the movement. At present, citizen investors in many countries are blocked from putting their money in sustainable investments. Many of these regulations are designed to protect citizens from risk they cannot assess. It is important to find a way to protect investors and give them access to sustainable investment opportunities at the same time."
"In today's legislation capital requirements are a function of risk. In our opinion that means that banks with exposure to unsustainable assets should be required to attract additional capital, reflecting the systemic risk of brown assets. In return, there should be a capital support factor (discount) for sustainable (green) investment. To meet the Paris Climate targets, pressure on unsustainable investments (still the bulk of finance today) is needed."
Read the report: New Pathways: Building blocks for a sustainable
finance future for Europe
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About the GABV
The Global Alliance for Banking on Values (GABV) is an independent, growing network of banks using finance to deliver sustainable economic, social and environmental development. Founded in 2009, members include 43 financial institutions and seven strategic partners operating in countries across Asia, Africa, Australia, Latin America, North America and Europe. Collectively the GABV serves more than 41 million customers, holds up to $127 billion of combined assets under management, and is powered by a network of more than 48,000 co-workers. Learn more at www.gabv.org.
About Mission 2020
Mission 2020 is a global initiative launched in April 2017 by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change and architect of the 2015 Paris Agreement. Mission 2020 aims to bring together political, business and civil society leaders to accelerate efforts to "bend the curve on greenhouse gas emissions by 2020". The initiative has set out six milestones to achieve by 2020 in order to meet the Sustainable Development Goals by 2030 and net zero emissions by 2050, in energy, infrastructure, transport, land use, industry and finance. Learn more at www.mission2020.global.
About Finance Watch
Set up in 2011, Finance Watch is an independent non-profit association with a mission of making finance serve society. It acts as a public interest counterweight to the powerful financial lobby. Its mission is to strengthen the voice of society in the reform of financial regulation by conducting advocacy and presenting public interest arguments to lawmakers and citizens. Finance Watch has 46 member organizations and 30 individual expert members from 14 different countries in Europe. Learn more at www.finance-watch.org.
About Triodos Bank
Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its €13.5 billion (2016) in assets to create social, environmental and cultural value in a transparent and sustainable way.
With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 43 banks seeking to transform finance into a vehicle of positive influence.
Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request.