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The Principles for Responsible Investment (PRI) has published its 2030 EU Policy Roadmap, outlining key recommendations for European policy makers to accelerate private investment in the economic transition. The report presents policy actions and tools available to the next Commission to create a financial system that rewards responsible investment, operates within planetary boundaries, and promotes equitable societies. It serves as a starting point for the PRI’s conversation with the next European Commission, European Parliament, and the Member States.
Despite notable progress since the 2018 Action Plan on Financing Sustainable Growth, challenges persist in implementing sustainable finance policies. While welcomed by responsible investors, the complexity and pace of legislative measures have posed significant hurdles. Moreover, the focus placed on enhancing corporate and investor disclosure had led to other pivotal aspects of sustainable finance being overlooked.
Elise Attal, PRI’s Head of EU Policy, comments: “The next 5-year mandate will be pivotal and, while a lot has been achieved, further policies will still be needed to truly unlock private investment and fully support the sustainable economic transition. The next Commission should focus on fine-tuning and improving the usability and coherence of the existing sustainable finance framework, building on it where necessary, and strengthening the links with broader EU Green Deal policies. This is necessary to achieve a coherent policy framework that accounts for sustainability risks, opportunities and impact by investors and companies.”
To address these challenges and realise the objectives of the EU Green Deal, the PRI calls for cohesive and transformative policy actions. The economic transition demands urgent and tailored measures to enhance the existing sustainable finance framework and to align it with broader EU Green Deal policies. The report sets out six policy priorities to achieve this – each with a dedicated chapter. Amongst other key actions, the European Commission, alongside the Parliament and Council, must look to:
- Finance the transition via swiftly developed sector roadmaps, comprehensive national strategies, robust corporate transition plans, an extended EU Taxonomy, and efficiently leveraged EU funding instruments.
- Clarify sustainable investment disclosures through a revised SFDR framework which includes a baseline of disclosures for all financial products and product categories with proportionate minimum criteria.
- Strengthen investor stewardship with a new omnibus legislation which recognises the critical role all forms of engagement play in sustainable finance policy, and further develop and clarify fiduciary duties.
- Ensure effective corporate governance via policy reform on taxation and political engagement and continue to improve corporate reporting in reviews of the ESRS.
- Promote global interoperability by collaborating with policy makers worldwide to seek consensus on the importance of sustainability-outcomes focused policy.
- Implement climate, nature, and social policies, as these issues are increasingly relevant for investment decisions, and financial markets depend on the effective implementation of these policies for the economic transition.
Related Article: EU Cohesion Policy: €3.85 Billion for a Just transition Toward Climate Neutral Economy in Five Polish regions
With the recommendations outlined in the report and based on extensive interviews, surveys, and roundtable discussions with PRI signatories and key stakeholders, the PRI aims to guide the next European Commission, Parliament, and Member States in advancing sustainable finance policies. PRI remains committed to fostering dialogue and collaboration to shape and execute a robust policy framework that empowers investors to drive the private finance necessary for the economic transition.