The European Parliament said green finance and consumer protection should be put “centre-stage” in EU financial services legislation.
MEPs voted yesterday on a Green Paper for retail financial services, a series of proposals for insurance and investment products.
A large majority of MEPs urged the European Commission to boost efforts to promote green financial products, such as developing a dedicated legal framework for green bonds and introducing an rating system for environment, social and governance investment, and for financial market actors to take into account environmental and social risks in their investment decisions.
One particular area of concern for MEPs was an end to ‘greenwashing’ by establishing strict, clear legal definitions of ‘ethical’, ‘alternative’ or ‘green’ in financial products.
The Commission will now publish an Action Plan, setting out steps to build a deeper single market for retail financial services.
The plan will consider how to improve consumer protection when buying financial services cross-border and online, and how to reduce the legal and regulatory obstacles firms face when providing financial services abroad. There is also an emphasis on digital disclosure.
Proportionality of rules between various fund regulations, with particular focus on aligning remuneration regimes and reducing reporting burdens, will also be assessed.
Sven Giegold, German Green MEP, noted that the paper’s proposal to strengthen the powers of the European Supervisory Authorities to enforce consumer protection was voted down due to resistance by Conservatives. As a result, he said, an opportunity to call for action to enhance trust in the Single Market has been lost.
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