- The movement of capital is global, and investors need comparable sustainability reporting regardless of where their investments are located.
- Corporate financing has urgent need for flexible and diverse options besides bank financing.
- These points were raised in the Nordic Financial Ecosystem Forum webinar on 4 May. A link to the recording of the webinar is available at the end of this article.
Green finance and the role of European capital markets in economic growth were the focus of the webinar organised by the Nordic Securities Association (NSA) and Nasdaq. Finance Finland is a member of the NSA.
In the first panel of the webinar, panellists discussed sustainable finance and how the EU’s ambitious climate and environmental policies could be combined with economic stability. MEP Sirpa Pietikäinen underlined the need to update all financial regulation to take sustainability impacts into consideration. The other panellists agreed this was important but expressed their concerns over a potential green bubble and the fact that hastily prepared regulation may miss its target.
Jane Thostrup Jagd, senior lead financial consultant at green power company Ørsted, said that reporting requirements imposed through regulation may not provide investors with the information they most need.
“Before the final reporting indicators are picked, the process should hear out the actual end-users – the investors and lenders.”
Managing Director of the NSA Sindre Støer said the financial markets benefit from the ongoing green trend, but at the same time, the markets should watch out for a bubble caused by capital concentrating in the few economic activities currently covered by the EU Taxonomy.
“If something goes wrong, the financial services sector will be blamed for the consequences of political decisions, however well-intended.”
Erik Thedéen, director general at the Swedish Financial Supervisory Authority and the Chair of IOSCO’s Task Force on Sustainable Finance, pointed out that because the movement of capital is global, investors need comparable sustainability reporting regardless of where their investments are located. Thedéen’s hope is that the first proposals for an international standard will come out in November.
New sources of funding in addition to banks
The second panel of the webinar focused on capital markets and the capital markets union. The European Commission’s Deputy Director-General for financial stability, financial services and capital markets union John Berrigan reminded that the economies of member states are recovering unevenly from the coronavirus pandemic.
“There is now urgent need for flexible and diverse options in corporate finance other than bank lending. The Commission puts particular weight on the establishment of a European Single Access Point that would increase the transparency of business information and provide investors and providers of funding with comparable and comprehensive data.”
In the panel, MEP and Vice-Chair of the ECON Committee Stéphanie Yon-Courtin called for more ambitious development of capital markets across Europe. According to Yon-Courtin, improving retail investors’ confidence in financial sector companies and products would be one area worth improving, for example.
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