Climate in the centre of the economy
A very good morning.
It's great to be in Athens and the sun is shining, which is also very nice.
But honestly I think my work is done this morning.
Because I've heard incredible statements of commitment from ministers, from the chair, around this topic of climate at the very centre of the economy.
You've got down to business straight away this morning.
Because I think as a country you have experienced the reality of climate change.
Its impact on lives and livelihoods.
So it's very real and honestly this morning, you have echoed that very strongly in your really clear commitments around climate action and indeed a plan, which is so, so important.
I want to acknowledge the reason I'm here, which is the chair of IOSCO.
Thank you for putting me on this agenda.
I want to talk about money because money is also really important.
I want to talk about our commitments as a European Union around climate action.
And maybe also the realities of the challenges we face, with some concerns around different groups in society around the big asks of them and how we can manage this transition.
But I like the title, climate at the centre of the economy.
Those practical questions, chair, that you raised in your opening remarks.
Really important questions about how do we finance this transition.
And indeed can I just say Minister Hatzidakis, you and I meet regularly in Brussels. Thank you for your very strong remarks.
And I can echo your call that around Capital Markets Union, we need to do things sooner rather than later.
And in my view, it is getting late, so thank you for your clear words in relation to it.
And I think we can get there.
Europe has always got obstacles towards progress, but we can find a way forward when the pressure is severe enough for us to do that.
Also to acknowledge that in this topic, the global conversation on sustainable finance, that IOSCO is leading in this.
And makes enormous contributions to it.
So we know what the agenda is.
We have seen the realities in all Member States. In the one I know best, it's been persistent rain, unusual rain patterns, that for our very core of our society, the food producers, the farmers, they've had real issues around managing their farms because of climate change.
So they're in the first line of fire.
I want to focus today on private investment meeting our climate targets.
I want to echo and make some more comments about completing Capital Markets Union.
It's a really important project.
And also to outline the elements of our sustainable finance framework.
You know our ambitious targets in the European Union.
They are set in stone.
Climate neutrality by 2050.
But also a target of 55 percent cut in emissions by 2030, and rising to 90 percent by 2040.
And these dates are ever closer, so we need to really spring into action.
Meeting those targets will require additional investment, and the figures vary, but between €600 to 700 billion every year.
I say that slowly so that it sinks into all of us, the extent of the investment need.
But of course it shouldn't be an investment without return, because I think we sometimes see the cost but not the value of investment, and in fact the imperative of investing.
Scaling up renewable energy, solar and wind, and can I compliment you on your targets here as a government and achieving success around renewables.
Sustainable transport also, I know the story here. Our homes and offices need to be made more energy efficient.
And it's very clear that the public purse, while it will contribute, will simply not be able to meet all of these significant needs.
We need funding from other sources, and not just banks.
And that's why Capital Markets Union is so absolutely important.
Yet today we have very fragmented capital markets across 27 Member States.
We have marked last year 30 years of the single market, four freedoms, but we have not completed the freedom of movement of capital.
And this is something that if we can achieve, and we must achieve, can unlock huge sums of money to invest in a more sustainable economy and society.
We know that today, Europe is really good on innovative companies that start up in Europe, but run into barriers to get access to finance when they go to scale up.
And they leave the European Union.
So it's a challenge that we need to face to provide them with more funding opportunities inside.
Because many of these innovative companies are the very ones that are driving and developing low-energy technologies to meet all of our targets, particularly on microchips and data centres; energy efficiency developments; ways to reuse and recycle particularly electronic waste.
So we need to hold onto these countries, to their innovation and allow them grow within Europe.
Because bank finance is not always available or accessible to these companies.
So again Capital Markets Union is really important.
Good news on CMU, Capital Markets Union, is that our leaders at the highest levels have made absolute commitments that this needs to be done.
So we have heard commitments also from the Eurogroup that this is a project that needs to be completed.
Again in my view there is an absolute imperative to mobilise private investment.
And it really, really is urgent today.
And we are doing a lot as a Commission to drive that.
So we are pushing obviously for a completion of Capital Markets Union.
But we've also worked on the other side of the coin.
How do we get money flowing towards sustainable investments?
What information is available from companies for investors to drive progress in this area?
So I know our framework can be sometimes quite complex.
So we have reporting from companies, sustainability reporting, coming very soon.
We have a taxonomy.
We have a regulation so that we can see what financial products are actually delivering in terms of sustainability.
I see this, our sustainable finance framework, as an important jigsaw.
Pieces that will work together.
I'm also conscious that the framework can be complex, if you view it without the clarity of putting all these pieces together.
And I bring it down very simply to the need for information.
So I know in my role as Commissioner, I was very struck that before we had our framework in place, companies could report on all sorts of sustainability standards.
So you couldn't compare the sustainability records between companies.
Which left investors confused as to, where would you put your money.
How could you be sure that you weren't investing in a company that was greenwashing.
And it was very clear that we needed information.
So therefore we needed companies to report on sustainability, in the same way as we report on profit.
So profitability and sustainability are now, in my view, going to be on the same footing.
Because investors will then make assessments on companies and decide where they want to put their money.
If investors chose to invest, and I think they do, in a more sustainable project and company, they will have the information to back their decisions.
So the Corporate Sustainability Reporting Directive is really important to provide that information.
But I'm also conscious when we were issuing the European Sustainability Reporting Standards, so that companies would see these standards as useable and workable.
Rather than being too much, too soon and too difficult to follow.
So we were proportionate in the work we did around reporting standards.
We want our framework to work and to be effective.
We want companies to use it, not just as something to report, that they have to do.
But to use all the elements, including our EU taxonomy, to plan their transition to a more sustainable future.
And I think one of the things we have realised is we have had too binary a discussion – green or non-green.
In fact, progress is made somewhere in the middle – those companies that want to be sustainable, but are not there yet.
And all of our tools allow companies to get on board and make plans for their future.
And I say this in particular of the taxonomy, because it is essentially a reference handbook, setting out those economic activities that are in line with our targets around climate and environment.
And already companies are using this.
We've helpful guidance, because again we want this to be useable and practical.
And it's been very encouraging to meet entrepreneurs who have some concerns, but actually now realise this is something they can work with.
So the framework is coming together.
But I'm also very conscious, I think we are in this room, that climate will not be solved, the challenge will not be solved, by Europe alone.
It is a global challenge, which therefore means we need to make sure that our standards work with the global action around sustainability and here we work with our international partners, the G20 Sustainable Finance Working Group and the International Platform on Sustainable Finance.
So we want global consistency.
We also have the Sustainable Finance Disclosure Regulation, about transparency for investors about investment products that are sustainable.
And indeed I mentioned that briefly, just shortly.
We have the European Green Bond Standard.
Again it's a voluntary effort.
It can be used by public and private sectors.
So really what I'm trying to outline here very briefly is that we have all the tools in place.
And now let's make it work.
And let's see the results from that work, so that we see investments flowing towards projects and enterprises that are sustainable for the long term.
And again on this, and including transparency on ESG ratings, I want to acknowledge IOSCO's work on this topic.
Your 2021 report recommended setting up oversight of ESG rating providers, their operations and products.
And our ESG ratings regulation takes the recommendations you made into account.
So we have the framework.
We know the needs, so everything is there, very visible and we also very visibly see the impact of climate change, each and every single day.
And what we also need to do is acknowledge those transition risks that may be there, including in the financial sector, and manage those risks.
So our banks, our insurance sector, will need to develop prudential transition plans that address the sustainability risks they face in the medium to long term.
And that is a key part of our work.
On transition plans, stakeholders have asked for extra guidance on the process, and we're very happy to support in that regard.
We work closely with our Platform on Sustainable Finance and with EFRAG, the standard-setter, and of course the European Supervisory Authorities.
So planning is really important around the transition.
And we are in transition ourselves in the Commission.
So a lot of the work that needs to come will be done by the incoming Commission.
But the ground rules are already in place for us to be very active in this area.
I mentioned the Disclosure Regulation, and some in the room will know that is a regulation that we are looking at, at the moment, with the possibility of revision.
Because sometimes there are unintended consequences and we need to address those.
My own view is that the market is correcting itself, but I'm sure over coffee we can have that conversation.
So it's an active area of policy, and one that we must intensify our efforts on at all times.
Because the minister so kindly and so clearly expressed support for Capital Markets Union, really I just want to endorse what was said here.
You could be disappointed by the lack of progress.
Or you could be encouraged by the intention of making progress, and I rather see the glass half full, rather than half empty.
But I say that with an element of warning as well.
We are in the midst of European Parliament elections.
It will be the Parliament and incoming Commission and Council that will drive the success of the CMU, Capital Markets Union, project – or not.
And I think that we have to really push that this project happens, and quickly.
As the Minister says, sooner rather than later.
Maybe I'll be a little more blunt.
We just will not have the money to finance our transition plans, without unlocking the potential of Capital Markets Union.
And that's absolute fact, and we have many reports that already are saying that.
So we need to heed the warnings.
Companies, large and small, can use our taxonomy, all of our instruments, and I'd like to include SMEs.
They're important for the Greek economy. They're important for Europe's economy.
They have been a little bit frightened by all of this sustainability discussion.
We want them to be included in it.
We want those that are in the supply chain of large companies to be helped along the way, to be supported by the large companies in their transition.
We do not want SMEs to be left behind, and they do not want to be left behind, so we have a duty in that regard.
And we will work to make sure that the SME standards are also very proportionate.
So there's a lot of good things happening here, and I'm convinced we can move forward.
But I do want to end with a word of caution.
I was in America quite recently, but this is not news to you. ESG is unfortunately not universally supported.
And I think we all know that there is a risk of a declining commitment in some places to environmental, social and governance issues globally.
We in Europe have made a commitment, on targets.
We've also made a commitment on a just transition – leaving no one behind.
We must never forget that.
We have to live up to that commitment.
Or – and I think this a real warning to all of us that work in policy – we risk losing support for what is absolutely essential: building a more sustainable economy and society, which tackles the really big issues of climate and biodiversity loss.
And that's why I very much welcome an opportunity to make these short remarks.
And reflect what's on the screen here.
Climate is at the centre of our economy. It is not peripheral to it.
Let's work from here, and I'm really enthusiastic that this conversation is so strong in Greece.
Thank you all for your commitment.
| Zařazeno | st 29.05.2024 14:05:00 |
|---|---|
| Zdroj | Evropská komise en |
| Originál | ec.europa.eu/commission/presscorner/api/documents?reference=SPEECH/24/2987&language=en |
| lang | en |
| guid | /SPEECH/24/2987/ |
