On 8 April 2020, the European Commission (EC) launched a new consultation on the renewed sustainable finance strategy.
Building on the 2018 Action Plan on financing sustainable growth, the renewed sustainable finance strategy will provide a roadmap with new actions to increase private investment in sustainable projects and activities to support the different actions set out in the European Green Deal, and to manage and integrate climate and environmental risks into our financial system. The initiative will also provide additional enabling frameworks for the European Green Deal Investment Plan.
Working closely with its member firms, and on behalf of the broader industry including beneficial owners, both ISLA and its Council for Sustainable Finance contributed to this process by submitting detailed responses across a number of key areas.
- Importance of global standardisation and alignment to promote the broad sustainability agenda in capital markets.
- Review of many EU policies and regulations to as not to hinder the development of incorporating sustainable finance into securities lending (e.g CSDR cash penalties and buy-in regimes, as well as Shareholder Rights Directive II and the lack of harmonisation in the definition of a ‘shareholder’).
- Sustainability transitioning. Securities lending as an example of a mechanism that can facilitate the financing of the sustainability transition. The transition will require properly functioning, transparent and liquid markets.
- Recognising the work of the Council and the Global Principles for Sustainable Securities Lending framework.