Investors representing €6.6 trillion ($6.76 trillion) in assets are warning Europe’s top lawmaker not to water down key sustainable finance regulations under moves to simplify the bloc’s rules.
The European Commission is set to introduce its Omnibus Package on Feb. 26, which will amend sustainable finance regulations in Europe. With an aim of boosting competitiveness, the commission will simplify sustainability reporting, due diligence and taxonomy under the package.
The group of investors represented by the Institutional Investors Group on Climate Change, the European Sustainable Investment Forum and the Principles for Responsible Investment includes 162 asset owners and asset managers.
In a joint statement, the group warned that plans for “reopening these regulations in their entirety risks creating regulatory uncertainty and could ultimately jeopardize the commission’s goal to reorient capital in support of the European Green Deal,” a set of policies that work toward making the EU climate-neutral by 2050.
Key European sustainability laws that the group expects to see revised include the EU Taxonomy, the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.
Instead, the group wants the European Commission to focus on targeted changes to technical standards and clearer implementation guidance.
The statement, which also includes suggestions for a targeted approach to tweaking sustainability frameworks, has been shared with Ursula von der Leyen, president of the European Commission, and key EU commissioners, the release said.
A recent report, "The Draghi Report on EU Competitiveness," highlighted an annual investment gap of €800 billion in order for the EU to reach its industrial decarbonization and competitiveness objectives.
“Private capital is needed to bridge this gap,” said Aleksandra Palinska, executive director at Eurosif, in the release. “To play their role, investors need quality, reliable and comparable corporate disclosures, including on sustainability risks and impacts. EU rules on corporate sustainability reporting have been expected to fill the existing data gap. Sweeping changes to these rules, before they are fully implemented, will create regulatory uncertainty and are likely to hinder the contribution investors can make to sustainable growth. Instead, the focus should be on supporting companies to implement the rules effectively, and if necessary targeted adjustments of rules at the technical level.”
Signatories to the statement include the 440 billion Danish kroner ($60.4 billion) PKA, Hellerup, Denmark, and the NZ$ 76.7 billion ($42.6 billion) New Zealand Superannuation Fund, Auckland.