The Regulation of Sustainable Finance in the EU

Sustainable finance began occupying a prominent place on the EU’s policy agenda following the signing of the Paris Agreement on climate change and gained significant push with the creation of the High Level Task Force on Sustainable Finance (2016), the EU Action Plan on Sustainable Finance and the Technical Expert Group on Sustainable Finance (2018). The recognition of the urgency of financing the transition to a low-carbon economy and contribute to mitigation and adaptation are at the heart of the EU’s sustainable finance strategy, which aims to mobilise and channel capital towards green/sustainable instruments.

Likewise, the EU’s current policy agenda and regulatory framework reflect the need to finance the green transition and limit the potential for risks and threats that could undermine economic and financial stability through a prudential approach to climate and environmental risk management, where the finance sector is expected to commit to building a resilient and sustainable financial system.

The Covid-19 pandemic also contributed to a major push the EU’s sustainable finance agenda, as it fostered the EU’s green financial capacities through the NGEU instrument, where around 30% of the NGEU’s RRF will be financed through green bonds. The EU has also recognised the urgency for financial institutions to integrate ESG factors into their business models and risk management strategies, with the aim of ensuring that the entire financial sector plays a key role in driving the transition to a sustainable economy, and also intends to continue exploring new ways to increase the mobilisation of private capital towards sustainable investments. On the latter, a number of important new policy initiatives have been emerging, but much remains to be done to address ESG-related challenges.
Likewise, policy developments are not only moving fast, but also represent a major challenge for financial institutions and financial regulators and supervisors, as they must adapt quickly to these policy changes while at the same time striving to contribute to a resilient and sustainable economy and financial system.

In light of the latter, this training course will aim to provide an overview of key EU regulatory developments (including current and upcoming legislation), such as the EU taxonomy, the EUGBS proposal, recent initiatives related to disclosure and climate benchmarks (i.e. SFDR, CSRD among others). It will equip participants with relevant knowledge and tools to better understand and critically reflect on the potential opportunities and challenges posed by the new pieces of legislation for different actors/sectors, including policy makers, prudential supervisors and the private finance sector.
In terms of format, this course will be delivered during a 3-day residential course at the EUI premises in Florence. It will also include interactive practical activities/exercises and two optional sessions at the end.