There is no alternative" - the well-known quote by Margaret Thatcher in her plea for more market and competitiveness of the British economy in the early 1980s also fits the environmental and climate policy goals of the EU today. The need to transform the European economy to adapt it to climate change mitigation and adaptation measures may indeed be without alternative. As a means for the transformation towards more sustainability, however, the EU relies rather less on market instruments and more on the ordering hand of a classification of economic activities according to their current malus in achieving environmental and climate policy goals. The corresponding taxonomy and the financial market regulation referencing it (Sustainable Finance) are intended to steer the mobilisation and channelling of financial resources through the financial sector and thus force a rapid transformation of the real economy towards more sustainability.
Sustainable Finance - for German SMEs
Ingmar Jürgens and Christian Fahrholz discuss what this path towards a sustainable economy will most likely mean for companies and especially for German SMEs in a current article in the magazine "die bank" that is well worth reading. This article addresses the challenges, but also points out opportunities and outlines perspectives for implementation so that the German SME economy can function as an engine of transformation.
The authors argue not only for more proportionality in sustainability regulation, but also in particular for an application of the EU Green Bond (EuGB) standard as a reference framework for ESG-compliant investments on the capital markets (see Securitisation and Regulation News 6 July 2021). They see potential for more market in the financing of sustainable transformation in the further development of the legal framework for securitisation markets. It is possible that Margaret Thatcher post hum is right that more market and competitiveness of the European economy will effectively contribute to achieving the environmental and climate policy goals for which there is no alternative - but we still have to take the necessary steps.
