EU’s sustainable finance platform to provide guidance on use of estimates, chair says

The EU’s Platform on Sustainable Finance will work on guidance for the finance sector on best practice around estimates and proxies when it comes to sustainability reporting.

The chair of EU’s sustainability advisory body, Helena Viñes Fiestas, said that the guidance would cover how best to use estimates and proxies when it comes to assessing the “taxonomy alignment of non-EU players and those EU players that do not fall under the scope of the Non-Financial Reporting Directive (NFRD) now and in the future, the Corporate Sustainability Reporting Directive (CSRD)”.

She was speaking in a pre-recorded interview played at the Investment Association’s conference Thursday.

Last month, the European Commission stated that it would allow financial institutions to use estimates in its Q&A on the Sustainable Finance Disclosure Regulation (SFDR). “Now we need to provide the Commission with proper guidance on how we think that financial market participants should use those estimates,” Viñes Fiestas said.

She described the use of estimates as “one of the biggest calls of the previous Platform”.

Viñes Fiestas has been closely involved in developing EU policy on sustainable finance over the past five years as a member of the Technical Expert Group (TEG) and the first version of the Platform. She became the chair of the second iteration of the Platform in February.

Another area that the Platform is going to look at “very closely”, she said, is what the EU’s taxonomy and sustainable finance package means for developing countries.

“We do not want the taxonomy or any of the ESG package to be a barrier for investments where they most needed,” Viñes Fiestas said.

When it comes to the taxonomy, Viñes Fiestas also stressed that the focus is on implementation. This includes providing users of the taxonomy with a package of tools to help them use it effectively.

“People feel that they need to learn how to programme and that they need to read all thousands of pages in order to use it and my key message today is that no you don’t, we are going to facilitate the use to you, we are going to provide you with the ‘Microsoft Office package’ – we’ve already started with the Taxonomy Compass, but we plan to do much much more,” she said.

When asked what she would consider success after the two years of the Platform’s current mandate, Viñes Fiestas replied, “I think success will be when the taxonomy is no longer being regarded as a reporting burden but is regarded as a tool that is helping funds and companies to access better and cheaper capital.”