The building blocks of the EU's Sustainable Finance Agenda

On 8 February, the European Commission announced the new 28 members members of the Platform on Sustainable Finance . The Platform's main goal is to advise the Commission on the implementation and usability of the?EU taxonomy and the sustainable finance framework more broadly.?

What were the key milestones for the previous Platform? A brief summary:

• In 2018, the Commission set up a Technical expert group on sustainable finance (TEG) to advise on making sustainability considerations an integral part of its financial policy. TEG's work resulted in recommendations published on the development of a classification system?(the EU taxonomy ); a usability guide for green bond standards ; climate benchmarks ; and climate-related disclosures .
• With the end of TEG's mandate in 2020, the first two-year mandate of the Platform on Sustainable Finance started, with a mandate until October 2022. The Platform published a response to the Complementary Delegated Act (CDA), addressing the inclusion of gas and nuclear energy into the taxonomy; a report on social taxonomy ; and reports on the data and usability of the EU Taxonomy and minimum safeguards .

How does the EU taxonomy complement the wider the sustainable finance framework? The below infographic explains how this classification system feeds into the mandatory disclosures under CSRD and SFDR:

To zoom out even more, this 4-minute video Maud Gaudry brilliantly lays out the origins and the full legislative program of the EU Sustainable Finance Agenda:

We are excited to see what milestones lie ahead of us and ISFC is grateful for the opportunity to be involved in the Platform on Sustainable Finance.

In the news?

Current power sector on “a tipping point”: According to the International Energy Agency (IEA) 's forecast, energy demand is expected to rise at a faster pace - mostly coming from China, India and south-east Asia, writes Financial Times .

EU Gas storage capacities: An intense withdrawal of gas from storage resulted in a decrease of gas stocks. Francesso Sassi outlines the EU's current gas demand:

Unsatisfactory progress: Climate pledges of 24 large corporations do not add up. The current pledges will lead only to 36% GHG emission reduction, which is not enough to prevent a catastrophic increase in global temperatures, writes Carly Wanna for Bloomberg News .

Recycled wind turbines: A new chemical process could allow wind turbine blades to be broken down into raw material and reused, writes Adrijana B. .

Double digits: Year-on-year inflation in the OECD - OCDE as measured by CPI slowed further to 9.4% in December 2022, states the statistical report , with the highest inflation rates recorded in Hungary, Latvia, Lithuania and Türkiye (all above 20%).

Mining the moon: Astrophysicists propose using lunar dust grains to scatter sunlight away from Earth, writes Oliver Milman for The Guardian .

Gas and nuclear: Greenpeace will take the European Commission to the European Court of Justice over the inclusion of fossil gas and nuclear energy in the taxonomy, violating the Taxonomy Regulation, the European Climate Law, and the EU’s obligations under the 2015 Paris climate agreement.?

Recommended reading

EU ESG index: DG FISMA published a new Study on the feasibility, minimum standards and transparency requirements of an EU ESG Benchmark label , setting out the creation of minimum standards for an EU ESG Benchmark.

Fossil fuel subsidies: International Energy Agency (IEA) published its Fossil Fuels Consumption Subsidies 2022 Report , with first fossil fuel subsidy estimates for 2022 - showing that global fossil fuel consumption subsidies doubled from the previous year to an all-time high of USD 1 trillion.

V4 emissions: ISFC had a closer look at the highest-emitting sectors in the Visegrad4 countries, examining what the options for emission reduction. The Executive Summary of the recently published?Sustainable Investment Roadmap is now available in Czech, Hungarian, Slovak, and Polish.

Who wins on cleantech: "The Inflation Reduction Act is already acting as a strong magnet, attracting cleantech innovators and investors with clear market signals", summarises Cleantech for Europe in its report . What can the EU do to scale its clean technologies?

Czech heavy industry: Decarbonisation is a sensitive topic for Czechia, a?country with a long tradition of industrial production and with more?than one-third of added value coming from the sector - assesses Karel Vold?ich the Czech financial and policy framework in this publication by ISFC.

Ocean plastic: A new research paper by Lourens J. J. Meijer and colleagues from The Ocean Cleanup outlines the countries with highest ocean plastic waste pollution: The Philippines has 4,820 plastic emitting rivers and is estimated to emit 35% of the ocean’s plastic.

3 scopes of carbon emissions: Insightful visualisation of Scope 1-2-3 emissions by Visual Capitalist .

Swapping dependence from Russia to China?: Check out this graph on regional shares of manufacturing capacity shared by Ann Mettler :

Sustainability-related?financial?information: Which body provides the ‘global baseline’ in sustainability standards? Carol Adams discusses the different approaches found in GRI, ISSB and TCFD reports.

Theory of change: This working paper form the World Bank Group addresses the impact of Green financial sector initiatives (GFSI) on decarbonisation and the adjustment of financial risk parameters in the economy.

Data, scenarios and models: In ISFC's most recent blog piece , Réka S. writes about revised climate scenarios, the debate on climate modelling and data generating processes.

Carbon offsets: As carbon offsets become ever more popular for hard to decarbonise industries, the University of Oxford Principles for Net Zero Aligned Carbon Offsetting shows how to avoid greenwashing.

GPP practices: Public procurement contributes to about 15% of global GHG emissions.?While Green Public Procurement represents an important tool to meet climate goals, it is still fragmented on a national EU level, writes SEI — Stockholm Environment Institute .

Plug-in hybrids 2.0: T&E together with the Technical University of Graz tested plug-in hybrids with disappointing results: CO2?emissions were higher in each test than the official values.

Carbon intensity of electricity consumption: Grant Chalmers from 澳大利亚昆士兰大学 posted about carbon intensity:

Circularity and the Ecosystem: What are the 3 bottlenecks slowing down transition to a circular economy? Robert Metzke summarises the main challenges from the World Economic Forum panel discussion on circularity.

CZ and PL in grey: This map created by Visual Capitalist shows Europe’s Biggest Sources of Electricity by Country.

Growth forecast: European Commission showcased its GDP forecast for 2023 and 2024:

Pensions funds & impact investing: Pensions for Purpose published a white paper on the challenges pension funds face due to unreliable data, credibility of carbon offsets, inconsistent metrics between asset classes, while highlighting areas for improvement for TCFD.

Fun reading about bullshitters: "Bullshitting ... is ubiquitous within human societies", writes Martin Harry Turpin et al. analysing the correlations between intelligence and the ability to be convincing without a concern for truth.

Top 15 books on climate change: Check out these book recommendations prepared by Quentin Fouesnant . Have you read them all?

Climate risk conference: National Bank of Slovakia - Národná banka Slovenska - in partnership with ISFC hosted a?special one-day event focused on climate and sustainability-related risks. Watch the opening speech by the Slovak Governor Peter Ka?imír and Klaas Knot , Governor at De Nederlandsche Bank . The panel discussions are also available on the same NBS website.

Podcasts

Acknowledging climate risk: In this episode of the Climate Transformed podcast, David Carlin and Paul Krake discuss the possibilities of mobilising climate financing for the emerging markets.

Taxonomy evolution: In the new episode of?Sustainability Bridges from Eurosif - The European Sustainable Investment Forum , Aleksandra Palinska talks with Helena Vi?es Fiestas , Chair of the new EU Platform on Sustainable Finance.

COP27 and COP15: The newest episode of The Sustainalytics Podcast focuses on the outcomes of the recently held COP conferences on green financing, blended finance and the support of climate adaptation in emerging markets.?

Events?

Online: On 20 February, Grantham Research Institute on Climate Change & the Environment hosts a webinar on the Prudential Net-zero Transition Plans.

Online: On 23 February, Clarity AI holds a webinar on How Can Advanced Technology Help Source Scope 3 Data.

Belgium: ISFC's CEO, Linda Zeilina-Cross will speak at the Sustainable Finance panel of the CEPS (Centre for European Policy Studies) Ideas Lab on 28 February.

Online: On 2 March, 玛泽咨询 Slovakia organises an afterwork chat focused on the calculations of carbon footprint emissions for scope 3.

Netherlands: 15 - 16 March, the Future of Utilities : Energy Transition Summit is happening in Amsterdam.

Florence, Italy: 23 and 24 March, Banca d'Italia - Eurosistema with European University Institute 's Florence School of Banking & Finance will host a two-day event focused on climate risk and prudential supervision.

Warsaw, Poland: On 28 March, International Sustainable Finance Centre (ISFC) in partnership with WiseEuropa is organising a one-day event on sustainable finance and energy transition at Bristol Hotel, in cooperation with Erste Group .

Budapest, Hungary: On 30 March, International Sustainable Finance Centre (ISFC) in partnership with Green Policy Center is organising a one-day event on sustainable finance and energy transition at Eiffel Palace, and in cooperation with Erste Group and PwC Hungary .