Legal & Regulatory News

European Court of Auditors publishes report calling for more consistent EU action to direct finance towards sustainable investment

On 22 September 2021, the European Court of Auditors (the ECA) published a special report (Special Report 22/2021: Sustainable finance: More consistent EU action needed to redirect finance towards sustainable investment) and accompanying annexes (the Report). The Report stresses that more consistent EU action is required in order to redirect private and public finance towards sustainable investments.

The Report concludes that the European Commission has rightly focused its actions on increasing transparency in the market, but has forgone accompanying measures to address the costs associated with unsustainable economic activities. The Report notes that many other actions undertaken by the European Commission have been delayed and are not ready for application yet, particularly the EU taxonomy which forms the basis of labelling financial products and standardising disclosure in the EU.

In the Report, the ECA recommends that the European Commission should:

• complete the 2018 action plan measures and clarify compliance and audit arrangements;
• better contribute to sustainable finance by pricing greenhouse gas emissions; and
• monitor and report on the results of the 2018 action plan and any future strategies.

Click here to access the Report.