Viñes Fiestas sees ‘light at the end of the EU sustainable finance tunnel’

Helena 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 subsequently the first version of the Platform on Sustainable Finance (PSF). 

As such, she was a natural choice to chair the second iteration of the platform – and the announcement in February of her appointment was warmly welcomed by the market.

Following the inaugural meeting of the reconstituted PSF last week – which, according to Fiestas, had a “really good atmosphere” and high-level presence from the European Commission – she sat down with Responsible Investor to reflect on how the group has evolved over the years and where it is going.  

She was keen to stress that since the launch in 2018 of the TEG – which was tasked with advising the commission on the taxonomy, as well as other sustainable finance matter – usability has been a key focus for her.

In the early days of the TEG, it became clear to me that there was a missing piece in the group about how we were going to apply the technical criteria to financial products and financial instruments and how the reporting should be done,” she said.

In response to this gap, the TEG created a workstream on usability and data within the taxonomy group. By the first version of the PSF, usability had a statute and had become a subgroup – of which Fiestas was the co-rapporteur – in its own right.  

“What’s interesting is that for version two it has gone from subgroup five to subgroup one – and I think that really reflects the direction of travel of our work,” she said.

She noted that, as the foundations for climate and other environmental objectives are set – “it’s not finished, but after the Environmental Delegated Act it will be 70-80 percent there” – how to “implement, apply and maximise the use and usefulness of the taxonomy” are becoming more relevant.

“Now, we need to focus on making it work,” she added.  

As part of the platform’s increased focus on usability, Fiestas envisages a closer relationship with users. 

“Now it’s no longer so much about influencing the making of the normative framework,” she said. “It’s about what are their implementation problems and how can we support them – so we are thinking about increasing the channels of communications with users and stakeholders of the taxonomy.” 

Fiestas acknowledged that corporates, financial market participants and financial institutions are currently “a bit overwhelmed” because of all the pieces of the sustainable finance package – like the taxonomy, SFDR, CSRD, Benchmarks, CSDDD – that are being implemented or finalised. 

“We as advisers to the commission need to bring all the pieces of the jigsaw together and ensure they fit well together,” she said. “This means consistency of definitions, avoiding duplication of metrics and duties, etc.”

Alongside an increased focus on usability, the platform will focus on how the taxonomy is enlarged and expanded to new activities, such as enabling activities or expanding the adaptation taxonomy. It will also look at the key activities involved in the different value chains of the activities. 

For Fiestas an exciting new challenge for the PSF will be developing a methodology and starting to monitor capital flows towards sustainable investments. “It requires a different type of skill, so when you look at members, you’ll see the amount of academics and data experts.”  

In the platform’s previous iteration, it submitted reports to the commission on what a social taxonomy and an environmental transition taxonomy could look like. Asked whether there will be any further work on these, Fiestas said the platform “will work on how to facilitate transition finance”. 

Lessons from Platform 1.0

Although Platform 1.0 was instrumental in furthering the EU sustainable finance agenda, it was not always plain sailing. 

A particular point of contention between the Platform and the Commission was the latter’s decision to classify some nuclear and natural gas activities as environmentally sustainable activities under the taxonomy framework.  

And in September, green NGOs left the platform, claiming the commission had interfered politically and acted against scientific evidence. Just before the exit, RI spoke to NGOs who pointed to feelings of burnout and claimed it was no longer possible to justify the unpaid hours and resources allocated to the PSF.

Reflecting on the lessons from Platform 1.0, Fiestas said she owes a lot to former chair Nathan Fabian. 

Going forward, she stressed that the Platform needs to maintain its independence when it comes to developing technical criteria and making recommendations to the commission.

At the same time, she added: “With the new task on monitoring capital flows and the emphasis on simplifying and consistency of the overall sustainable finance framework, this will require tight collaboration with the Commission and other European bodies.”  

Fiestas acknowledged that, for platform members, managing workload is a major challenge: “We want to do so much, and we all have our daily jobs.”

However, she added that, by the end of Platform 1.0, members “had become much more effective in reaching out to experts outside, in working with others through workshops and in making meetings outcome-driven”. 

Since the TEG first launched, taxonomies have been springing up around the world. Fiestas said she welcomes this, although further interoperability will be welcome.   

She also noted that several members of the platform are very active in the development of other taxonomies, or have provided advice. “[As a platform], we will continue to provide advice to the European Commission on improving interoperability through its role of co-chair of the International Platform on Sustainable Finance.” 

Overall, Fiestas said she is “starting to see the light at the end of the tunnel”. “Now we’re really focusing on improving, instead of having a blank piece of paper like we had when we started the TEG.”