A new impetus for the European sustainable finance framework

Key points

The EESC:

• assesses how the EU’s sustainable finance framework can be made more robust and fit for purpose given its importance for the EU’s economic, social and climate objectives;
• affirms that simplification should not come at the cost of ambition. While administrative streamlining is needed, the focus should be on how requirements can be implemented more effectively, not on weakening standards;
• urges EU institutions to ensure that the Omnibus packages support the sustainable finance framework while facilitating company compliance as a positive component. Changes to the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) should not undermine the EU’s ability to scale up sustainable investment and meet the European Climate Law targets;
• finds that this framework has improved transparency, but this is not enough to drive the necessary systemic shifts. Adapting requirements around transition plans and changing due diligence obligations should not threaten the integrity of the framework. Some of the changes of the Omnibus packages could put it at risk;
• urges the Commission and Parliament to maintain ambition and ensure coherence across the sustainable finance architecture;
• at the same time supports efforts to make reporting requirements more proportionate, particularly for SMEs;
• reiterates its call for a sustainable finance framework that addresses the full environmental, social and governance (ESG) spectrum, and is willing to take its part in the design of minimum social safeguards and to implement a social taxonomy;
• highlights the need for a framework that properly accounts for the full spectrum of risk associated with unsustainable activities. This includes recognising the social costs of such actions;
• calls for clearer definitions of key sustainability concepts. This includes through the formal recognition of transition finance as a distinct part of the EU’s sustainable finance agenda;
• calls for the new legislative framework for sustainable finance to make it easier for SMEs and social economy enterprises to meet their requirements;
• believes that collective savings instruments, such as occupational pension plans, must be strengthened as a solid source of sustainable investment;
• calls on the EU and Member States to reaffirm their financial and political commitment to the sustainability agenda. Adequate fiscal space must be preserved for green and social investment.