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The Association for Financial Markets in Europe (AFME) released a new report 'Sustainable Finance in the EU: Priorities to Unlock Financing and Investment.' The document elucidates the perspectives and recommendations of AFME members concerning the operational aspects of the existing EU sustainable finance framework. It specifically addresses the challenges that banks encounter in applying this framework to finance companies.
Furthermore, the report underscores AFME's constructive suggestions for policymakers. It delves into how policymakers and regulators can enhance the capacity of financial institutions to offer financing that aligns with climate, environmental, and social objectives.
The report puts forward five key recommendations to address identified challenges:
Maintaining Focus on Roadmaps: Emphasizing the establishment of roadmaps, aiming to reduce regulatory barriers hindering the deployment of sustainable investment projects, and offering incentives to facilitate the transition of the real economy.
Evaluating Regulatory Effectiveness: Ensuring that the regulatory framework is effectively achieving its goals. Striving for coherence and practical usability to actively promote and support sustainable finance, including the realm of transition finance.
Stability in Regulatory Framework: Providing a stable regulatory framework with ample time for implementation. Regularly reviewing its functionality in practice, introducing targeted guidance or changes as necessary through collaboration with market participants.
Promoting Investment Without Adverse Impact: Assuring that regulations actively encourage investment without adversely affecting the competitiveness of financial institutions or companies operating within the EU and on the global stage.
Enhancing International Coordination: Strengthening international coordination efforts and improving interoperability with other key jurisdictions to foster a cohesive and globally effective approach.
In addition to providing recommendations to enhance the effectiveness of the EU regulatory framework, the report also outlines AFME's suggestions in three other critical areas that the organization identifies as priorities for EU policymakers:
Facilitating Transition Finance: Proposing measures to streamline and support transition finance, recognizing its significance in promoting sustainable economic shifts.
Developing Carbon Markets: Offering insights and proposals on the development of carbon markets, aiming to create effective mechanisms for carbon pricing and trading within the EU.
Scaling Finance for Nature: Providing recommendations on scaling up financial initiatives dedicated to supporting and preserving natural ecosystems, underscoring the importance of sustainable finance in the realm of environmental conservation.
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