The NSA approach to sustainable finance combines efforts to achieve the EU’s climate and energy goals, support transition to more sustainable economic activities, as well as promotion of economic growth. The NSA has actively engaged in the work relating to the EU’s Sustainable Finance Action Plan and partner with co-legislators in finding efficient and practical solutions to steer the European economy to a sustainable path.

EU taxonomy is a tool, not a rulebook, for sustainable investments

The purpose of the EU taxonomy is to help investors to direct capital towards economic activities which contribute most to the achievement of environmental objectives, while also respecting minimum social and governance standards. The NSA sees the taxonomy as a tool for investors to identify future-proof economic activities, while leaving the door open for also other investments that contribute to environmental, social, and good governance objectives. The NSA considers it to be important to have a transparent and predictable management and governance process for changing and updating the taxonomy over time.

Disclosure rules in the financial sector should be based on available information

A requirement for financial market participants to increase transparency about sustainability risks can have the positive impact of more investments being directed to actions that support environmental objectives. Transparency and disclosure, when provided in a proportionate and easily understandable way, can facilitate the possibility to make well-informed investment decisions.

Financial companies have a range of ways to integrate sustainability considerations into their investment strategies. However, measuring sustainability performance and impact is sometimes difficult. The regulation on sustainability-related disclosures in the financial services sector mandates financial companies to disclose inter alia principal adverse impacts on sustainability factors. While the NSA considers it to be important to consider these impacts, we note that currently the financial sector has a scarcity of tools available to make such an analysis. Against this background, the NSA would support the development of common digitalized data collection methods including the European Commission’s proposal in this part on a European Single Access Point (ESAP).

Environmental reporting needs to be harmonised throughout the economy

The NSA supports the work done to pull together the different sustainability-related company reporting models under the proposed Corporate Sustainability Reporting Directive (CSRD). This can help companies by reducing the need to manage different reporting frameworks if the same information can be given by a single common template. A concern with the proposal is the proposed practical implementation and timing of reporting. The timeline set out by the Commission is very ambitious. The NSA considers it to be essential that companies are given sufficient implementation time even if the preparation of standards gets delayed. This could in practice be accomplished by making the date of application dependent on the date of finalization of the first sustainability reporting standard.