The European Association of Co-operative Banks (EACB), the voice of 3.135 co-operative banks in the EU, welcomes the opportunity to comment on the European Commission’s proposal for a “Regulation on the establishment of a framework to facilitate sustainable investment”.
Co-operative banks, with their networks, as local and regional banks, play a key role in the development of a more inclusive and sustainable finance. This is via sustainable investments or savings products, energy transition project financing, green financing to SMEs and energy efficiency financing of private and public buildings, to mention some. Some co-operative banks are leaders in green bonds. Co-operative banks also reinvest significant portions of available profits back into the community and are driver for territorial and social cohesion. Numerous national awards for institutions from the co-operative banking sector are the evidence of this specific approach based on proximity and sustainability.
This being the case, the EACB and its members expressly support the political targets to significantly reduce the risks and consequences of climate change, as well as to improve social cohesion. These can be achieved via diverse measures to which public authorities, private households and companies should contribute. In this context it is of particular importance to create incentives in such a way that economic actors take the decisions that combine welfare growth and development, i.e. of ‘sustainable growth’. This Association considers sustainable growth a responsibility that goes beyond the role of individual companies, customers, or finance. Sustainable finance is undeniable a joined responsibility of all branches of the economy.
Concerning the “taxonomy” proposal, the EACB would like to highlight that it supports and welcomes the establishment of a common classification system for environmental sustainable activities. However it cautions that the present proposed regulation (‘taxonomy’) can have potentially far reaching consequences for financial institutions. Indeed the taxonomy shall be the basis for all future legislative measures, not only impacting asset managers, pension funds and insurers but also banks. The retail (network) banks views and the specific co-operative approach shall therefore be taken into account in developing the taxonomy. In our comments we highlight the retail banks aspects, considering that the Commission’s and international initiatives are often too focused on the capital and asset management side. We believe that a greater emphasis should be put on local and regionally oriented banks such as co-operative banks.
Thus, the EACB asks that the taxonomy as well as the reporting are simple and flexible, while the implementation is gradually tested and carefully assessed, for example using non-binding or soft tools. Finally we underline the importance of the principle of proportionality and of a thorough impact assessment.
Please find in the annexed document the detailed EACB Comments on : i) including co-operatives approach /governance when defining sustainable finance; ii) subject matter, scope and definitions (types of taxonomies, suggestions and questions); iii) use of the criteria for environmentally sustainable economic activities (liability and assessment); iv) environmental objectives; v) technical screening standards and Commission’s delegated act; vi) implementation timeframe; vii) Platform Sustainable Finance; viii) proportionality.