Climate Finance Policy Engagement Analysis
Climate Lobbying Overview: Invest Europe appears to have fairly limited engagement on sustainable finance policy, but does not appear to support stringent regulatory intervention.
Top-line Messaging on Climate-Related Financial Policy: Invest Europe has stated support for the EU's net zero by 2050 target in its 2021 Climate Ambition Statement, however has also appeared to suggest that voluntary action by the private equity sector is largely sufficient in addressing sustainability risks. In feedback to the European Supervisory Authorities (ESAs) on greenwashing in 2023, Invest Europe highlighted that market participants should not be penalized for having taken a “wrong” view regarding regulation and that greenwashing does "not warrant its own regime".
Position on Regulated Corporate Climate Disclosure: In feedback to the European Commission in 2020, Invest Europe was cautious about the review of the Non-Financial Reporting Directive (NFRD), arguing against the expansion of the scope to SMEs and private investments and opposing mandatory standardized disclosure. However, it welcomed the proposal by the Commission in 2021 on the Corporate Sustainability Reporting Directive (CSRD), emphasizing that it should be aligned and compatible with legislation already in place, such as the SFDR and that it should follow the materiality and proportionality principles.
Position on Taxonomies, and Climate Standards and Labels: In a 2022 response to ESMA, Invest Europe opposed efforts to introduce quantitative thresholds for fund names using ESG or sustainability-related terms, arguing that the introduction of these guidelines is not “within the powers of ESMA”. In meeting minutes from a January 2023 meeting between ESMA and Invest Europe on the same guidelines, Invest Europe requested a longer transition period for close ended funds, while it requested a grandfathering provision exempting close-ended funds in a 2024 letter to ESMA. In feedback to the Platform on Sustainable Finance proposal for an extended taxonomy, Invest Europe suggested that a significantly harmful taxonomy ‘could be useful’, however should not be a priority and could potentially restrict funding from transitioning businesses.
Position on Integrating Climate into Investor Duties: In a 2023 response on EU Sustainable Finance Disclosure Regulation (SFDR), Invest Europe did not support Principal Adverse Impacts (PAI) disclosures for Article 8, proposed widening the definition of 'sustainable investment' to include transitioning products, supported removal of website disclosures and entity level PAI disclosures, and did not support minimum binding targets for proportion of sustainable investments. In a letter to the Commission during in 2023, Invest Europe did not support the disclosure requirements on alternative investment funds under Article 10 of the SFDR.