The European Association of Co-operative Banks considers the work on EU ECOLABEL for Financial Products as an important step and welcomes the possibility to comment on the Preliminary Report of the JRC (Joint Research Center of the European Commission).
Given the fact that Co-operative Banks are typically retail banks, who interface mostly with households and SMEs clients, we answered to the specific questionnaire from the point of view of “distributors”.
Following the analysis of the Preliminary Report on EU Eco Label for Retail Financial Products, published last March, EACB Members believe that, in order to create a European ECOLABEL for financial products, the adoption of a set of mandatory criteria is too strict. As outlined in the report, one of the main disadvantages of this proposal is that only very small market of products could be certified. This heading for a niche contradicts the basic idea of the Action Plan. Moreover, a perception that the vast majority of existing ESG-/SRI funds is excluded from certification might even risk the so far successful development of this market.
We therefore strongly recommend an approach that combines a mandatory (pass/fail) system for certain criteria with a point-based system. The Eco label should be constructed in a way that is open to all (or at least most) already existing sustainability investment approaches. By this, the Eco-label could serve as a starting point for a SRI label that we see as a must in a medium-term perspective.
EACB underlines the importance to understand that different sustainability approaches have so far developed in order to serve different financial needs. Sustainable investment strategies (like thematic and impact investment) will – due to their inherent higher investment risk – always remain only a minor part of a prudent investor’s portfolio.
7 May 2019
EACB Response to the EC Consultation on the Development of EU Ecolabel Criteria for Retail Financial Products
EACB