Taxonomy and sustainable financial investment

Report on the workshop organized by the Inequality Community of El Día Después on 4th November to discuss impact and sustainable investment.

Sustainable finance is increasingly the vehicle used to generate sustainable investments that have a financial return, but mainly that impact society and the environment.

In this sense, the Inequality Community of El Día Después organized this workshop on 4th November to delve into impact and sustainable investment.

The workshop began with a presentation on taxonomy by Helena Viñes, Deputy Director of Sustainability at BNP Paribas AM and Member of the EU Technical Expert Group on Sustainable Finance. 

The EU’s sustainable finance strategy responds to an awareness that there can be no sustainable green policy without taking the financial sector into account. Therefore, it proposes a 180-degree transformation of this sector.

In particular, the proposal includes the decarbonization of credit and investment portfolios, and to progressively increase investment in activities and services that allow society as a whole to carry out this transition.

Taxonomy is the tool that will help carry out this transition, as it is a living dictionary that will be updated every 3 years. It establishes the economic activities that can be considered sustainable and under which circumstances.

In her presentation, Helena Viñes highlighted five key features of taxonomy:

  • The double conditionality framework, in other words, in order for an economic activity to be part of the taxonomy, it must not only substantially contribute to one of the 6 environmental objectives, but it must not harm the rest of the environmental objectives and social standards.
  • Taxonomy is framed in scientific evidence and existing environmental strategies for each of the objectives of the European Union. Therefore, the criteria established, including the thresholds, reflect the effort or the necessary contribution of each activity to achieve the European environmental objectives within the foreseen time frame.
  • Taxonomy is a revelation on the path to a carbon neutral economy. Unfortunately, science confirms that there are economic activities that are not carried out in a carbon neutral scenario. In terms of investing, this means that the economic life of a project or asset must be taken into account to avoid retaining carbon-intensive assets.
  • Taxonomy is the bridge between environmental and financial activity. It is revolutionary because it is the first common tool to measure the degree of sustainability of a company’s activities and investments in a fund.
  • Taxonomy is a piece of a much larger puzzle, it is the reference of the ecosystems that are being created and that will allow to analyze the environmental and social preferences in investments.
Taxonomy is framed in scientific evidence and existing environmental strategies for each of the objectives of the European Union
Taxonomy is revolutionary because it is the first common tool to measure the degree of sustainability of a company's activities and investments in a fund

Helena Viñes

Afterwards, the workshop was divided into two rooms. The first one was to analyze impact investment as a tool to reach the 2030 Agenda and the second workshop was on sustainable investment. They were both moderated by Agustín Vitórica, Co-founder and Co-CEO of GAWA Capital and Miquel Rubio, Director of Development at Anthesis Lavola, respectively. 

The main conclusions from both workshops were:

  • The importance of focusing on specific projects and moving from the vision of avoiding damage to generating long-term social and environmental impact.
  • Taxonomy must relate environmental with social aspects better.
  • A debate is proposed on how to put taxonomy into practice and make companies accelerate their sustainability, either through sectoral groupings and/or non-business solutions.
  • Public-private partnerships need to be promoted. Examples were given on combined investment, institutions such as B-Corp, where results are measured with facts and specific initiatives, impact funds in listed companies, etc.
  • A pending challenge is to also reach SMEs.
  • Alliances must also be made with the tertiary sector. Therefore, it is necessary for the tertiary sector to have the technical knowledge to carry out these alliances in a setting of trust.
  • It is essential that universities give this paradigm solidity.

Video: Summary in 13 mts (In Spanish). Please, enable automatic translation on Youtube

Ideas and comments from the attendees (Spanish)

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