On January 31, the High-Level Expert Group on Sustainable Finance (HLEG) published its final report on strategic recommendations for the EU to develop an overarching and comprehensive roadmap on sustainable finance. One of its key recommendations is to reform disclosure rules to make sustainability opportunities and risks transparent.
The Group worked intensively last year to produce this report where it identifies ways in which the EU can steer the flow of capital towards sustainable investments’, and how the financial sector can re-connect with the real economy to support the transition to a more resource-efficient and more circular economy.
The report proposes to place a greater focus on environmental, social and governance (ESG) factors into investment decisions. It supports reforming rules on public disclosure, as a key action to enhance transparency. Among other things, the Commission is recommended to use the review and amendments of the Non-Financial Reporting Directive in 2018 and 2019 for this reform.
The HLEGs recommendations should also be underpinned by another recommendation: a classification system, or 'taxonomy', to provide market clarity on what is 'sustainable'.
The Commission will now finalise its Action Plan on Sustainable Finance on the basis of these recommendations. It is expected to be published in the next weeks and will be discussed, together with the final report of HLEG, on March 22 at a High-Level Conference.