Sustainable Finance in Europe: Regulatory State of Play

The Association for Financial Markets in Europe (‘AFME’) and Linklaters indicate very significant progress has been made in Europe to build a regulatory framework for sustainable finance, including:

  • Developing a disclosure framework for sustainability reporting
  • Providing a common classification system of economic activities contributing to sustainability objectives through establishing a Taxonomy; and
  • Ensuring that ESG risks are effectively integrated into risk management.

The European Commission (‘EC’) estimates that Europe will need €500bn in additional investment annually over this decade to meet its 2030 environmental goals.

The Global Financial Markets Association (‘GFMA’) estimates the funding need at $100tn-$150tn over the next three decades to support the decarbonization of ten sectors representing 75% of global carbon emissions.

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