Global and EU sustainable finance initiatives
Produced in partnership with Kathryn Emmett, Rosa Mottershead, Rob Marsh, Andrew Hedges, Imogen Garner and Cara Dowling of Norton Rose Fulbright
Global and EU sustainable finance initiatives

The following Banking & Finance guidance note Produced in partnership with Kathryn Emmett, Rosa Mottershead, Rob Marsh, Andrew Hedges, Imogen Garner and Cara Dowling of Norton Rose Fulbright provides comprehensive and up to date legal information covering:

  • Global and EU sustainable finance initiatives
  • What is sustainable finance?
  • Global action
  • EU action
  • UK action
  • What does the future hold?

In response to the Paris Agreement, governments and intra-governmental organisations launched a number of measures to promote sustainable finance. To date, these have focused on voluntary measures, relying on businesses and investors to self-monitor in this area. As the global move towards a more sustainable economy gathers pace, and the need to respond to the risks presented by climate change becomes more urgent, these measures are beginning to be transposed into legislation and regulation. While many financial institutions have already implemented internal systems for assessing and monitoring the sustainability of their businesses, the introduction of regulatory frameworks focused on sustainable finance should lead to standardisation in this diverse area, requiring financial institutions to assess and report on sustainability issues within their existing governance and risk management structures.

This Practice Note will outline global and EU initiatives in sustainable finance, as well as the current approach in the UK.

What is sustainable finance?

Sustainable finance refers to the integration of environmental, social and governance (ESG) criteria by financial institutions into business or investment decisions. Its origins lie in climate finance (referred to under the Paris Agreement as ‘finance to fund activities that reduce greenhouse gas emissions or help in adapting to the impact of climate change’), although the scope of sustainable finance is broader, and links also to the UN Sustainable Development