Enabling green growth transition
Public hearing on sustainable finance took place in Brussels
Maria Koleva, Brussels
22 July, 2017
Looking ahead to the low-carbon future, one of the main priorities of the Juncker's Commission is strengthening the EU's global leadership on sustainable finance. It has to do with a robust green finance arm that can prop up economic growth and lower pressures on the environment, coping with green-house gas emissions and pollution, improving efficiency in the use of natural resources.
Last December the EU executive established a High-Level Expert Group of 20 senior experts from civil society, the finance sector and academia which has to provide till the end of 2017 recommendations on how to better integrate stability into financial policy field and protect the stability of the financial system.
Six months later the expert group, chaired by Christian Thimann, tabled the first results and policy options in an interim report and on 18 July the Commission convened in its Charlemagne Building in Brussels a public hearing on sustainable finance. On focus were the challenges and possible solutions for increasing sustainable public and private financial flows.
The EU needs a strategy to re-orient the financial system towards supporting long-term, sustainable, and green growth, said Valdis Dombrovskis, vice-president for the euro and social dialogue, also in charge of financial stability, financial services and capital markets union. He recalled that at the G20 summit in Hamburg, 19 countries put in writing that the Paris agreement is irreversible. VP Dombrovskis added that Europe will deliver the transition to a low-carbon, more resource efficient, and sustainable economy and the financial sector has a key role to play in enabling this transition.
In this respect, the automobile sector has already taken the lead. These days Volvo announced that all new models launched after 2019 will be electric or hybrid. Recently France declared that it considers ending the sale of gasoline and diesel vehicles by 2040 and becoming carbon neutral by 2050.
The three things that Europe needs to do, according to VP Dombrovskis, is to set out a strategy for sustainable and green finance, to keep reforming the regulatory framework, and to ensure that capital flows towards green and sustainable projects.
As the chair of the expert group Christian Thimann asserted, sustainable finance is about two imperatives. The first is to prove the contribution of finance to sustainable and inclusive growth, funding particular society’s long-term needs of innovation and infrastructure and accelerating the shift to low-carbon and resource efficient economy. The second is to strengthen financial stability. In short, sustainable finance means better development and better finance, he specified.