Background and objectives of the session
The global shift toward a low-carbon economy to combat climate change demands private capital mobilization for sustainability. Financial activities, including decarbonization, responsible financing, and portfolio greening, are pivotal in this transition. EU regulators have implemented climate-related disclosure rules, sustainability labels, the EU taxonomy for sustainable activities, and green bonds to promote sustainable investments. However, implementation challenges persist. Globally, initiatives like the NGFS, GFANZ, and TPI primarily focus on risk mitigation.
Uncertainties and conflicts arise due to the unprecedented socio-economic transformation, including concerns about the compatibility of financial institutions’ sustainability goals with traditional financial objectives. Ensuring adequate funding for transitioning industries is vital, especially those slow to adopt renewables. Clear and consistent transition strategies, communication, and global alignment are crucial.
Small and medium-sized enterprises (SMEs) play a vital role in achieving net-zero goals but face obstacles like limited access to sustainable finance, complex regulations, and the need for new business practices. Supporting SMEs with resources and incentives enhances their resilience and involvement in the low-carbon transition.
In this dynamic context, the session’s objectives include assessing the current transition status, identifying areas for improvement, and proposing policy initiatives, particularly for SMEs, to facilitate a holistic transition and optimize the financial sector’s contribution.
Questions to be addressed.
- What are the priority actions necessary to address the remaining key transition challenges?
- What are the key reasons for the transition not being on track, and what challenges do citizens, corporations, public authorities and the financial sector face in achieving timely net-zero goals?
- What are the main contributions and improvements expected from the implementation of current policy initiatives, combining transparency efforts regarding economic player performance and sectoral EU policy frameworks like Fit for 55 ?