I4CE Newsletter - EU Commission's Sustainable Finance Strategy

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The European Commission has just published its new sustainable finance strategy, and the good news is that this strategy no longer focuses exclusively on sustainable finance! It is finance in general that the Commission wishes to better regulate so that it takes into account the climate challenge. The Commission has listened to the proposals of many experts, and in particular those of I4CE, in this direction. If this evolution is remarkable, the new strategy remains unfortunately vague on key issues such as the modification of prudential rules, or even silent on - for example - the integration of climate criteria in the variable remuneration of financial actors.

This week, in the last newsletter before the summer break, I4CE invites you to read or reread its latest reports related to the new sustainable finance strategy, and to discover a brand new publication on one of the tools promoted by the Commission: climate stress tests.

#I4CE_Report

#New Report I Climate Stress test : The integration of transition risk drivers at a sectoral level
To measure the vulnerability of financial institutions to different scenarios of economic decarbonization, central banks and supervisors are trying out "climate stress tests" and the Commission intends to support this movement with its new sustainable finance strategy. While the pilot exercises use decarbonization scenarios that consider the economy as a whole, I4CE's latest study explores the value of using more detailed scenarios. To capture the risks to financial institutions, shouldn't we look at how each sector - from cement to real estate - might transform?

#2minOn

#Video: 2 minute on Climate Stress tests
What is a climate stress test? Why is the sectoral view important in such an exercise? Clara Calipel from I4CE answers these questions and summarizes in 2 minutes the main results of her study on the integration of risk factors at the sectoral level.

#FlashFromThePast

#Report: Can financial regulation accelerate the low-carbon transition?
Training of financial advisors, clarification of fiduciary duty, transparency of non-financial rating agencies... These are some of the proposals of the new sustainable finance strategy that you will also find in this I4CE report published earlier this year. A report that listed the concrete actions that financial regulators can take to accelerate the financing of the low-carbon transition and go beyond the traditional objectives of regulation: financial stability and the proper functioning of markets.

#Report: Taking climate-related disclosure to the next level – minimum requirements for financial institutions
While the Commission wishes to improve the climate disclosure for financial institutions, I4CE invites you to read its latest report on the subject. In order to improve the quality of the information published, the authors of the report propose to clarify the concepts used by financial actors such as "alignment" or "contribution" to climate objectives. And they call for minimum quality criteria on the methods they use to assess their progress.

#Report: Landscapes of climate finance in Europe
In its new strategy, the Commission commits to help Member States to assess their climate investment gap and to measure financing flows. I4CE, which has been carrying out such an exercise for France for several years, is pleased that this proposal is back in the spotlight. This is an opportunity to reread this former publication by I4CE and the European Environment Agency, which, back in 2016, reviewed the value of such exercises.

#Tweets of the month

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