PRI’s 2030 EU Policy Roadmap

Download pdf

The EC’s 2018 Action Plan on Financing Sustainable Growth was a turning point for the role of finance in an economic transition. Since then, new legislative measures have made significant progress in forming the building blocks for a sustainable finance policy framework. 

While responsible investors have welcomed this progress, the speed, complexity and sequencing of the various measures have posed substantial implementation challenges. Further, the EU’s legislative reforms have largely focused on driving sustainable capital allocation via improved corporate and investor disclosure, overlooking other levers that investors have, or the barriers that they face. 

The next EC mandate leading up to 2030, a key milestone on the road towards net zero, needs to focus on creating a financial system that rewards responsible investment, operates within planetary boundaries, and achieves equitable societies. These outcomes are fundamentally intertwined with EU competitiveness, security and resilience. 

Recommendations for the future 

Urgent, well-tailored and transformative policy action is required to fine-tune and improve the usability and coherence of the existing sustainable finance framework, build on it where necessary, and develop and strengthen the links with broader EU Green Deal policies. 

The PRI’s report sets out six policy priorities to achieve this. Among other key actions, the European Commission, alongside the Parliament and Council, must look to: 

1. Finance the transition via swiftly developed sector roadmaps, comprehensive national strategies, robust corporate transition plans, an extended EU Taxonomy, and efficiently leveraged EU funding instruments.
2. Clarify sustainable investment disclosures through a revised SFDR framework, including a baseline of disclosures for all financial products and product categories with proportionate minimum criteria. 
3. Strengthen investor stewardship with a new omnibus legislation which recognises the critical role all forms of engagement play in sustainable finance policy, and further develop and clarify fiduciary duties. 
4. Ensure effective corporate governance via policy reform on taxation and political engagement and continue to improve corporate reporting in reviews of the ESRS. 
5. Promote global interoperability by collaborating with policy makers worldwide to seek consensus on the importance of sustainability outcomes-focused policy. 
6. Implement climate, nature and social policies. These issues are increasingly relevant for investment decisions, and financial markets depend on the effective implementation of these policies for the economic transition. 

There are 39 recommendations, grouped under six chapters, plus 12 recommendations in the annex dedicated to address consistency issues in the EU sustainable finance framework. The recommendations cover much of the EU’s key sustainable finance legislation including, among others, the Taxonomy, SFDR, and CSRD) and climate, social and nature policy such as RED III and the Nature Restoration Law. 

These recommendations are based on interviews with PRI signatories, European policy makers, and civil society members throughout 2023; a survey completed in Q3 2023 by 103 PRI signatories (of which 87% are based in the EU and 73% are investment managers, 22% asset owners and 5% service providers); and a signatory roundtable held in October 2023. 

By acting on these recommendations, the next European Commission, in collaboration with the European Parliament and Member States, will ensure an effective policy framework that enables and encourages investors to accelerate the private finance needed to achieve the economic transition.