European financial services update

President of the European Commission Ursula von der Leyen presented the 2020 Work Plan which sets out the main aims of the European Commission for 2020, as well as new initiatives and priorities for the coming year.

Of importance for members, the Commission has committed to ensuring that sustainable investments are mainstreamed across the financial system, proposing a Renewed Sustainable Finance Strategy in Q3 which will aim at redirecting private capital flows to green investments. The Commission will also attempt to embed a culture of sustainable corporate governance in private sector firms and will review the Non-Financial Reporting Directive in Q4.

There are also plans for an Action Plan on the Capital Markets Union in Q3, which will aim at better integrating national capital markets and ensuring equal access to investments and funding opportunities for citizens and businesses across the EU, including an initiative to strengthen intra-EU investment protection. This work, along with completing the Banking Union, has been signposted as central to the EU’s work on Brexit and will be an attempt to look to strengthen the international role of the euro. This will also be complemented by Q3 reviews of MiFID/MiFIR and the Benchmark Regulation.

European Green Deal: Sustainable Europe Investment Plan

To help reach its 2050 climate-neutral target, the European Commission unveiled the financial pillar of its flagship Green Deal: The Sustainable Europe Investment Plan (SEIP) and Just Transition Mechanism (JTM). The plan will help close the investment gap needed to facilitate the transition to a climate-neutral economy and raise long-term sustainable productivity and competitiveness.

The financial pillar of the Green Deal is based on three dimensions:

1. Financing to crowd in private funding
2. Providing incentives to unlock and redirect public and private investment
3. Providing practical support to public authorities and project promoters in designing and launching sustainable projects.

The SEIP aims to mobilise and unlock €1tn of public and private investment through EU financial instruments, notably InvestEU, along with the help of European Investment Bank (EIB) climate-dedicated funding. Alongside this, the JTM will help alleviate the socio-economic impacts of the transition in the most vulnerable regions. It will provide financial and practical support to help mobilise at least €100bn over the period 2021-2027, on top of the EU budget.

The CBI is remaining active in this area, working to ensure sustainable finance is applied uniformly across the EU. We released a Green Finance position paper in July 2019 and will continue our campaign encompassing the whole of the ESG spectrum.

We are committed to ensuring that member views are represented in Brussels and on the EU stage and would therefore welcome any feedback on the Commission’s proposals, and on how the initiatives could present opportunities or challenges for your business. Your feedback will help us shape our campaign and feed into our position.

For more information on these issues or to understand more about how the CBI works for members at EU level, please contact Megan Griffith-Otway.