Helena Viñes Fiestas has been appointed as chair of the EU’s Platform on Sustainable Finance (PSF). Her appointment comes as the group looks ramp up its focus on the usability of the bloc’s taxonomy and the EU sustainable finance framework as part of its new mandate.
The first version of the Platform on Sustainable Finance was launched in 2020 with 50 members and nine observers. It replaced the Technical Expert Group (TEG) on sustainable finance, which had been advising the European Commission on the taxonomy, as well as other sustainable finance matters.
A handful of TEG members moved over to the platform. This included Fiestas, who became the co-rapporteur for the sub-group focused on data and usability.
In its first phase, the platform was instrumental in furthering the EU sustainable finance agenda and produced reports on various components of the taxonomy, including the potential for a social taxonomy and an environmental transition taxonomy.
A spokesperson for the commission told Responsible Investor: “The platform’s reports provide input for further reflections, but they do not prejudge any decision or actions by the commission on the matters. No decision has been taken at this stage on whether to propose or not an extension of the taxonomy framework.”
The platform’s final report, which came in October 2022, raised concerns that half of the do-no-significant-harm criteria in the taxonomy could face usability challenges.
Points of contention
A key point of contention between the platform and the commission surrounded the latter’s decision to classify some nuclear and natural gas activities as environmentally sustainable activities under the taxonomy framework.
In September, green NGOs left the platform, claiming the commission had interfered politically and acted against scientific evidence.
Under its second mandate, the platform will focus on usability, to improve the implementation not only of the EU taxonomy but of the EU sustainable finance agenda, and continuing the development and update of the taxonomy criteria in line with the latest scientific, market and technological developments.
Speaking to RI, Fiestas who is also commissioner of the Spanish Financial Markets Authority and a member of the UN High-Level Expert Group on Net Zero Pledges, said: “It is a great pleasure for me to continue being part of the Platform on Sustainable Finance and I am very grateful to the commission for the trust put in me to hold the position of chair in its second mandate.
“I am looking forward to working with all members and observers and to contributing to the development of the EU sustainable finance agenda. The selected members and observers will provide the relevant expertise and important insights that will be instrumental to the overall success of the platform, as well as of the EU taxonomy and the EU sustainable finance agenda more broadly.”
Returnees and new appointments
Of the 28 members and five observers from the private sector and nine observers representing European institutions and international organisations, some sat on the platform’s previous iteration and its TEG predecessor.
Among them is Sean Kidney, CEO of the Climate Bonds Initiative.
“This next stage of what we have to do is to sort out some usability issues that became clear over the last 18 months with the taxonomy and make it simpler to use,” he told RI. “A bit too much complexity has crept in. And also, we haven’t got enough equivalents. In other words, if you’re outside the EU, you can’t use a lot of the parts of the taxonomy because there’s no equivalent measure recognised.
“There are imperfections. For example, member states have refused so far to put anything about agriculture and land use. However, for all its weaknesses, it is forcing financial institutions to look at what they’ve got on their portfolio that is consistent with climate change action and what isn’t. So we’ve got to just improve it to make it work.”
Echoing Kidney, fellow returnee Andreas Hoepner, a sustainable finance academic, acknowledged the data and usability hurdles flagged in the platform’s October report, but said he was “very confident that these can be feasibly challenged” in the next two years.
“I’m very much looking forward to working on the EU taxonomy and the wider EU sustainable finance agenda under the excellent leadership of Helena,” he added.
‘Robust and usable’
Among the new joiners is AXA Investment Managers’ Clémence Humeau. She told RI: “If further developed in a robust and usable manner, in conjunction with other critical regulations, I am persuaded the taxonomy has real potential to deliver its stated ambition, and to foster and accelerate the collective momentum we need to see happen to reach the goals of the Paris Agreement.”
She noted, however, that the first year of implementation “has shown that adjustments are needed” to ensure the different regulations work better, both individually and in relation to one another.
This is required “to enable an effective implementation by financial market participants and corporates, and ultimately improve trust and facilitate the allocation of capital to support decarbonisation and innovation in more sustainable solutions”, added Humeau, who serves as head of sustainability co-ordination and governance at AXA IM.
Other new members include Sustainalytics’ Hans-Ulrich Beck, Hélène Lanier of 2 Degrees Investing Initiative and PRI EU policy head Elise Attal, as well as Crédit Agricole’s Erwan Crehalet and Hélène Procoudine-Gorsky from CDP.
There are also seven permanent members among EU agencies and bodies that have been re-appointed directly.
Striking a balance
On the selection of individuals, the commission spokesperson told RI: “The aim was to find a balance between specific expertise and stakeholder representation. Not all sectors are necessarily represented, but there will be the possibility to invite ad hoc experts when needed to complement platform expertise.”
Aleksandra Palinska, director of Eurosif, welcomed the appointment of Viñes Fiestas as chair. “I think it is very well deserved,” she said.
“However, for the overall composition of the platform, I would have hoped for a higher number of investors and asset managers, given that I understand it is intended for the new platform to focus on making the taxonomy-related rules work in practice, monitor the capital flows, make adjustments whenever necessary, and consider the interactions with other EU sustainable finance rules.”
She said she hoped to see ample opportunities for the investment industry to provide feedback and interact through working groups and workshops.