Sustainable Finance Lobbying Overview: The European Association of Co-operative Banks (EACB) appears to have been very engaged on sustainable finance policy in Europe, generally pushing back against stringent regulatory interventions.
Top-line Messaging on Sustainable Finance Policy: EACB has stated support for the role of the finance industry in meeting the Paris Agreement and the European Green Deal and achieving net-zero by 2050. However, it has not clearly articulated a position on the need for systemic reform to achieve a sustainable financial system. EACB has argued that regulation in this area must be “workable” and “proportionate”, and has particularly emphasized that regulation should occur at the level of the real economy.
Position on Regulated Corporate ESG Disclosure: EACB appears to be supportive of improved corporate ESG disclosure requirements. In response to the European Commission on the Non-Financial Reporting Directive (NFRD) during 2020, EACB appeared to be supportive of improving regulated corporate ESG disclosure. Similarly, EACB offered support for the subsequent proposal for a Corporate Sustainability Reporting Directive (CSRD) in a Commission consultation response in 2021. However, in response to EFRAG’s consultation on the draft European Sustainability Reporting Standards (ESRS) in 2022, EACB argued that the disclosure requirements were too complex and challenging to implement in the legislation timeline and suggested considering the cost/benefit balance of some of the standards. In feedback to the Commission in 2023 on the ESRS, it supported the materiality approach proposed, which allows companies to determine which indicators are material to report on and appears to weaken the policy from the approach previously proposed by EFRAG. EACB stated concerns with the alignment with the Sustainable Finance Disclosure Regulation (SFDR) and suggested that certain requirements should be mandatory until the alignment issue was resolved. At the global level, in feedback to the International Sustainability Standards Board (ISSB) Climate and Sustainability Disclosure Exposure Drafts in 2022, EACB highlighted the lack of double materiality but also suggested that some transition plan disclosure requirements should be optional.
Position on Taxonomies: During 2019, EACB raised several concerns on the EU taxonomy, suggesting that the framework was too complex and supporting the weakening of some of the thresholds on what would constitute a ‘green’ investment. In feedback to the European Commission's consultation on the Renewed Sustainable Finance Strategy in 2020, EACB supported a weakening of the current transitional category and opposed expansion to cover environmentally harmful activities. However, in feedback to the EU’s Platform on Sustainable Finance in 2021, EACB appeared to support the creation of a “social” taxonomy and took a mixed position on the expansion to harmful activities. In a 2021 policy position and annual report, EACB further supported a taxonomy covering transition activities, but emphasized that the framework needs to be based on a “dynamic and positive” formula that encourages the transition.
Position on ESG Standards, Labels & Benchmarks: In 2019, EACB's feedback to the Technical Expert Group (TEG) on the creation of an EU Green Bond Standard (EU GBS) suggested support for a stringent standard, including alignment with the taxonomy and stringent requirements for reporting and external review. It also supported verification requirements for the EU GBS in feedback to the Commission in 2020. However, in feedback to the Joint Research Centre (JRC) on the creation of an EU Ecolabel for retail financial products in 2020, EACB supported the EU Ecolabel with a number of exceptions including arguing for some criteria to be weakened and suggesting that some of the compliance and verification requirements were “too onerous”. In response to the European Securities and Markets Authority (ESMA) in 2023, on its proposal for guidelines on funds' sustainability-related terms, EACB cautioned that introducing quantitative minimum thresholds “would be premature" and argued that these were too high.
Position on Integrating ESG into Investor Duties: In feedback to the Commission in 2020, EACB opposed updating fiduciary duty to include ESG issues and further opposed updating MiFID II to include ESG considerations into the advice given to clients. In response to the ESA’s Sustainable Finance Disclosure Regulation (SFDR) consultation on investor ESG disclosure in 2020, EACB argued against the stringency of the regulation and asked for considerations of the incurred costs to investors. In 2023, EACB opposed a number of technical elements of the changes proposed under the SFDR review, such as the new social Principal Adverse Impact (PAI) indicators in feedback to the European Supervisory Authorities (ESAs), and argued that financial institutions should not be required to disclose indicators deemed non-material under the ESRS.
Position on the integration of ESG factors into risk management, prudential regulation and stress testing: In comments to the European Banking Authority (EBA) in 2021, EACB stated concerns on the integration of ESG risks in the prudential framework, cautioning policymakers against placing the burden on banks to stimulate an orderly transition. Also in response to the EBA in 2021, it also cautioned against a number of technical standards under Pillar 3 disclosures on ESG risks, suggesting that these risks are a “risk driver” and not a “separate type of risk”. In 2022 comments to the EBA, it stated some concerns on the integration of environmental risks into prudential frameworks due to uncertainty and also argued against the use of double materiality in the prudential framework. At the global level, in feedback to the Bank for International Settlements (BIS) in 2022, EACB supported the integration of ESG factors into risk management/ prudential regulation/stress testing but highlighted the need for proportionality.
Transparency: EACB is fully transparent about its sustainable finance positions, including detail of engagement activities. It is also transparent about its members, including which companies and individuals hold key positions in the executive and on key committees.