EBF RESPONSE PAPER

EBF Response to the ESAs Call for evidence on better understanding greenwashing

BRUSSELS, 19 January 2023 – Sustainability has been attracting considerable and growing attention over the last years

Key messages

• With increasing regulatory developments and industry initiatives related to sustainability, greenwashing claims have naturally begun to arise as well
• With two thirds of the European economy being financed by banks, the latter have played and will continue to play a crucial role in the transition to a more sustainable economy.
• However, not only is the financial sector highly dependent on the sustainability claims of their clients and counterparties, but there are also other several elements beyond the control of the financial sector which are contributing to increased greenwashing claims, including:
  • Lack of clarity and consistency of EU regulation addressing greenwashing that is just coming into effect or about to do so, combined with short implementation times
  • The sustainability data gap and the lack of a single approach to the use of proxies and estimates across sustainable finance regulations
• The resulting increased risk of wrongful greenwashing claims and potential reputational implications may finally deter financial institutions from increasing transition and sustainability financing and the development of sustainable financial market products
• In this context, we support the objective of a focused approach to greenwashing covering all sectors of the economy based on the following elements:
  • link to the damage caused mainly to market integrity and/or customer protection due to misleading information of material omissions thatcould affect decision-making processes around sustainability
  • the presence of gross negligence and/or intentionality

• Finally, we see great value in building on existing initiatives, enhancing legal clarity and addressing areas of uncertainty or the lack of appropriate sequencing throughout the sustainable finance regulatory framework

For more information:
Denisa Avermaete, Senior Policy Adviser – Sustainable Finance, d.avermaete@ebf.eu

Alexia Femia, Policy Adviser – Sustainable Finance, a.femia@ebf.eu

x

About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.