The EBF advocates for a gradual approach as to the scope as well as introduction of the social and governance aspects. The “ECO” label should focus on environmental issues first, while only key social aspects such as human and labour rights, subject to availability of reliable data, should be included as a minimal social safeguard. As the social aspect develops in the taxonomy regulation, the scope of the ecolabel could be further enlarged. Development of a separate “sustainable label” that encompasses all aspects of the Environmental, Social and Governance criteria (ESG) could also be envisaged. Considerations could also be given to the development of labels with a different “degree of sustainability”, subject to operational feasibility and data availability.
The scope and the strategies to be reflected in the Ecolabel criteria would depend on its objectives. Investment funds addressed to retail clients and pension products should be included in the EU Ecolabel first. The EU green bonds as well as some other retail financial products such as life insurance could be targeted thereafter or subsequently. All strategies have their merits and use, depending on the objectives of the investment product. A combination of a minimum number of strategies could be envisaged.
The labels should add value to the product and act as a differential factor. The ambition should be that at least 5o % of investments are/be green. However, it may be difficult to have products that can qualify for the label in the initial phase, at least in some markets. Besides setting minimum thresholds, it is important to provide transparency to investors about the actual percentages used. Transparency and useful, understandable information to end-investors about eco-labelled products is as important as setting portfolio requirements. Consideration could be given to product-type specific thresholds.
Find the questionnaire with the EBF answers under the link below:
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“International Directors Banking Programme” is a new modular programme of three three-day modules at the INSEAD business school in Fontainebleau, France. The content is driven by the needs for bank directors and senior executives working in banks to review and update their corporate governance practices due to the many pressures they face, and will focus on the effectiveness of directors and boards. Successful completion by participants offers certification by INSEAD. Read more
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European Banking Federation
The EBF is the voice of the European banking sector, bringing together national banking associations from 45 countries. 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.
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