The European Commission must double efforts to create the more resilient and sustainable financial system that Europe needs, according to a coalition of environmental and development organisations.
The Capital Markets Union (CMU), hailed as Europe's response to the financial crisis, should give safer and more sustainable investment choices for European citizens and small and medium businesses. According to the organisations, current financial legislation including those regulations under the CMU don't address at all the strong regulatory foundation, which could lead to investments fuelling land-grabbing, human rights and environmental crime inside and outside the European Union. Voluntary approaches mean that potential Environmental, Social and Governance (ESG) damage is not identified as a financial risk.
Anne Van Schaik, finance campaigner for Friends of the Earth Europe said: "The CMU is supposed to be a cornerstone of a sustainable European economy delivering for the people of Europe. This means European financiers should not finance projects with detrimental impacts on people's lives. Sustainability must be at the core of the CMU, and the Commission should make sure the process is not dominated by vested financial interests."
Friends of the Earth Europe, Global Witness, ActionAid and WWF Europe, along with MEPs from the EPP, S&D, Greens and GUE groups organised a high level event on the Capital Markets Union today in the European Parliament, with European Commission Vice President Dombrovskis.
Vice President Dombrovskis is expected to address the sustainability component of the CMU midterm review to be published on June 8th. This is a critical opportunity for the European Union to take decisive positive action to regulate finance sector industries to prevent social and environmental damage as a result of financial investments.
The organisations are calling for an open dialogue between the EU and its member states with civil society, consumers, savers and the wider public to ensure the CMU works for people and planet.
This means ensuring that future legislative proposals, such as the personal pensions proposal and alternative investment funds are aligned in terms of environmental, social and governance issues – including a definition for these issues.
Sebastien Godinot, WWF European Policy Office: "The momentum is great for bold commitments of the Commission on sustainable finance, with the FSB Task Force on climate disclosure, the EU High Level Expert Group on sustainable finance and several financial places in Europe launching green finance initiatives: the Commission should take the lead not lag behind."