EESC calls for swift but gradual transition to sustainable economy

The EU has committed itself to working towards a low-carbon, more resource-efficient and sustainable economy in addition to social goals. Financing these commitments, taking into account environmental, social and governance criteria, constitutes an enormous investment challenge.

The EESC believes that Member States need to build a common European sustainability framework in order to ensure support from the financial system in the transition to a sustainable economy. Thus it strongly supports the Commission's Action Plan on financing sustainable growth, recommending its swift but gradual implementation. The proposed framework would be an important driver for restoring trust in the financial markets and connecting savings to sustainable investment in the real economy.

Although the EESC recognises the key role of financial market participants in the transition, it emphasises that society as a whole must be involved if the system is to be feasible.

Starting the transition by establishing a EU sustainability taxonomy, as well as low-carbon benchmarks, would make sense. The taxonomy should be dynamic and take account of business reality. The final aim should be to promote the taxonomy worldwide and incorporate it into EU law uniformly and simultaneously in all Member States. Measures must be introduced to make sure it is regularly revised and updated.

While the EESC agrees with starting by configuring and introducing a limited number of areas and legal obligations, first and foremost environmental factors, it welcomes the introduction of minimum social and governance guarantees from the outset. It would then be important to extend the initial taxonomy and legal obligations to social sustainability and governance goals in the future.

Finally, the EESC welcomes the proposed fiduciary obligations for financial market participants. This will allow end investors to align their investment decisions with their sustainability preferences.

More info: ECO/456 ECO/466 ECO/467 (jk)