This presentation cannot be interpreted without the supporting oral comments The possibility of extending the EU Ecolabel to Green Financial Products Click to edit Master title style Meeting of EUEB 5 February 2018 DG ENV and DG FISMA
2 EU Ecolabel for Green Funds/Investment Products: Where does the idea come from? Capital Markets Union Action Plan Sustainable Finance Action Plan Set up Sustainable Finance PRIORITY Interim Report Final Report 2016 2017 2018 1 st meeting 8 th and final meeting
3 HLEGSF recommendation and EU COM followup HLEGSF recommendation Establish a voluntary EU label for green themed funds, with specifications based on an EU Green Taxonomy (i.e. a list of sectors and activities considered as green) Under the framework of the EU Ecolabel Regulation Builds on the most advanced European labels in the sector COM follow-up Green Themed financial product perspective? or broader ESG HLEGSF Recommendation EU Ecolabel focuses on environment (allows for social and ethical factors as safeguards)
4 Labels for 'green' investment products would rely on a 'green' taxonomy of assets A taxonomy encompasses the description, identification, nomenclature, and classification of assets, activities, projects based on distinguishing characteristics. In the case of a green taxonomy, these characteristic relate to criteria to be met to be in line with a defined objective, such as climate change mitigation, climate change adaptation, biodiversity preservation, natural capital preservation, pollution prevention and control, etc. Wind Farms Development and construction Energy Wind Energy Infrastructure and manufacturing Operational production or manufacturing facilities wholly dedicated to wind energy development Transmission Wholly dedicated transmission infrastructure for wind farms Thermal insulation materials Source: Climate Bond Initiative Buildings Energy efficiency technology/ products manufacturing and supply Operational performance will recognise special purpose products needed to ensure buildings meet industry metrics, such as LEED and BREEAM standards HVAC systems Centralised energy control systems; home energy displays and smart meters Advanced, efficient appliances and lighting (e.g. LED) Advanced materials (e.g. reflective roof materials/systems)
5 Using the EU Ecolabel framework to label green financial products/services Opportunity for the EU Ecolabel to increase visibility and uptake Lessons to learn from existing labels already covering investment products Nordic Ecolabel Dutch Green Fund Scheme French TEEC label Austrian Ecolabel FNG LuxFlag Climate Finance & Environment / Green Bonds EU Ecolabel framework suitable for financial product group(s)
6 Financial products are in the scope of the Regulation Article 2- Scope This Regulation shall apply to any goods or services which are supplied for distribution, consumption or use on the Community market whether in return for payment or free of charge (hereinafter products ). Article 3- Definitions - operator means any producer, manufacturer, importer, service provider, wholesaler or retailer - environmental impact means any change to the environment resulting wholly or partially from a product during its life cycle Appendix I/A- Procedure for the development and revision of EU Ecolabel criteria (Standard procedure) They shall be based on the best products available on the Community market in terms of environmental performance throughout the life cycle, and they shall correspond indicatively to the best 10-20 % of the products available on the Community market in terms of environmental performance at the moment of their adoption
7 Legal framework of the EU Ecolabel Regulation Regulation (EC) No 66/2010 of the European Parliament and of the Council of 25 November 2009 on the EU Ecolabel Regulation Commission Decisions refers to defines requires the Commission to set up (Art. 5) define EU Ecolabel criteria per product groups published in the EU Official Journal based on General principles & rules Procedures for developing / revising criteria Label awarding mechanisms Supervision mechanisms Promotional activities EU Ecolabeling Board (EUEB)
8 EUEB: Stakeholder Membership can be amended by the Commission provides advice Commission Decision appoints EU Ecolabeling Board (EUEB) Art. 2.3: "The Commission may amend the membership of the EUEB as appropriate". Adopts its own rules and procedures in consultation with the Commission (Art. 3. 3.) composed of (at least one per EEA country) Competent bodies Stakeholders - Bureau Européen des Consommateurs - European Environmental Bureau - Business Europe - EUROCOOP - Stakeholders from financial world (Eurosif )
9 Additional Competent Bodies can be designated by Member States to deal with financial products Art. 4 of EU Ecolabel Reg: Each Member State shall designate the body or bodies Competent bodies are members of the EUEB. They shall ensure that the conformity assessment is carried out in a consistent, neutral and reliable manner by a party independent from the operator being verified, based on international, European or national standards and procedures concerning bodies operating product-certification schemes If more than 1 body, respective roles must be defined
10 EUEB Meetings Specific EUEB sessions may be dedicated to financial products EUEB Sub-group to deal with financial product can be created (sub-groups shall adopt rules of procedures)
11 Thank you for your attention!