The High Level Group on Financing Sustainability Transition was launched in 2018.

 

Transition and finance remains an important political priority in the 2024-2029 period, but Europe needs a more comprehensive approach to its financial architecture, as promised by decision makers but never decided upon. The top priority is now the Capital and Savings Union and the completion of the Single Market for services. 

​

A more comprehensive approach is required, investing in energy savings, in net-zero technologies and for the transition of less advanced ones. Efforts should be made also to redirect capital towards investments that are not yet considered green assets, but are contributing to decarbonisation. All actors should be able to finance their transition, regardless of their starting point. A three-step taxonomy design would better reflect the impacts of activities with an intermediate level of environmental performance on a broader scale.

​

A better allocation of resources needs to be elaborated through systematic climate investment monitoring at EU level, assessing the necessary investments to reach its climate targets for 2030, 2040, 2050, regardless of their source (public or private) and identifying sectors that need more funding (investment deficit) or are overfunded (investment surplus). 

​

​

An EU climate investment target (as a percentage of GDP) should be incorporated into EU economic governance and used as an indicator for EU economic governance and EU funds allocated accordingly. The existing EU “sustainable finance” framework should be completed with an equally ambitious EU “transition finance” framework : a clear and unequivocal definition of transition finance, applicable in practice via corporate finance instruments at entity-level (debt and equity). 

​

An EU standard for transition bonds in addition to the existing EU green bond standard and sustainability-related corporate disclosures based on a common methodology can ensure quality reporting, to be assessed and scored by a single European body, acting as an EU rating agency. Enable transition finance through prudential capital requirements for banks, a green lending facility and a green public guarantee scheme. Completion of the Savings and Investment Union is essential for the efficient allocation of capital throughout the Single Market and to support research and innovation.

 

This HLG is chaired by Pietro Carlo Padoan, former Minister of Economy and Finance of Italy.

Previous chair: Jeroen Dijsselbloem, former Minister of Finance of the Netherlands and chairman of the Eurozone Group of Finance Ministers.