Sustainable Finance

London is distinctly autumnal as we approach the end of September. With summer behind us, we expect a flurry of activity across EMEA in the sustainable finance regulatory landscape.

Earlier this month, the former European Central Bank President Mario Draghi released his report, ‘The Future of European Competitiveness’,1 which highlights the importance of getting the regulatory framework right. His findings will contribute to the European Commission’s work on a new plan for sustainable prosperity and competitiveness as well as the development of Europe’s new Clean Industrial Deal. Draghi stresses the need for radical change to boost productivity and restore Europe’s competitive edge against the US and China.

Global decarbonisation, as Draghi highlights, represents a key industrial growth opportunity for the EU – provided the right policies are in place. However, he points out that regulatory burdens have become a significant obstacle to Europe’s competitiveness. Indeed, more than 60% of EU companies see regulation as a barrier to investment, with 55% of SMEs citing regulatory hurdles and the administrative burden as their greatest challenges.2

For sustainable finance across EMEA, getting the regulatory landscape right is also essential to enhancing liquidity sufficiently for transition and green innovation. Legislative change in this area has been rapid and a complex ecosystem of sustainable finance regulation has evolved across EMEA. Striking the right balance between maintaining the integrity of sustainable finance products and allowing the flexibility for continued innovation is crucial. The Loan Market Association will continue its active dialogue with regulators to address key opportunities and challenges in financing the global transition.

As mentioned in the last edition of Horizons, I am collaborating with King & Spalding on a Greenwashing Insights Report to highlight the impact of greenwashing risks on the loan market and will explore the tools available to help market participants. I would be delighted to hear your views – please feel free to reach out if you’d like to get involved.

I am currently working on our Sustainable Finance Regulatory Committee project agenda for 2025. Please do complete this survey to let us know your views on where we can help.

You can also contact me direct at hannah.vanstone@lma.eu.com.