German government's sustainable finance advisors at odds over obligations for financial sector
Clean Energy Wire
Germany's Sustainable Finance Advisory Council (SFC) is in disagreement about the extent to which financial actors should be obligated to align their business with sustainability goals. The council is currently preparing recommendations to the government that aim to better align financial policy with climate and other sustainability targets. Presenting a first position paper to journalists in Berlin, Karsten Löffler, co-head of the Frankfurt School of Finance and Management and chair of the 38-member council, said its members, hailing from the finance sector, industry and NGOs, generally agreed on the "factual logic" of establishing a sustainable finance strategy. "However, there are still major differences regarding the obligation for financial actors," Löffler said. In its position paper, the SCF says its aim is that "all actors in the financial system systematically realign their activities" to contribute to a more sustainable economy and to address "target conflicts, barriers and inconsistencies in the existing regulatory framework", but stresses that it wants to achieve "a balance of rules and incentives" that "don't disproportionately burden actors in the financial system." Germany aims to develop "trendsetting standards" and attain "measurable advantages" for its financial sector. Löffler said the council had not put forth concrete suggestions but expects to come up with more tangible results in early 2020.
The German government installed the SFC in June 2019 to help prepare a national strategy for harmonising financial policy with the UN's sustainable development goals (SDGs), the Paris Climate Agreement and the country's obligations regarding EU emissions reduction targets. The finance ministry (BMF) recently said it would strive to reach a "global consensus" on addressing climate in finance and that Germany would put the topic high on the agenda of international forums.