Banks say German sustainable finance report impractical, insist on EU rules

Germany's banks say the country should push for EU-wide rules on sustainable finance, instead of creating its own "counterproductive" framework. In reaction to the first interim report by the government's Sustainable Finance Advisory Council, the lobby group German Banking Industry Committee (DK)  said the proposal is impractical for improving sustainability in finance. "As providers of sustainable finance products we need to rely on a Europe-wide regulatory framework. That's why we regard the council's demands as counterproductive, as these would impose national rules in addition to the European ones," Marija Kolak, head of the National Association of German Cooperative Banks (BVR), said. Kolak said the council was right to assign the government a key role in providing a framework for sustainable finance that spans all sectors of the economy, and pushing the topic during its Presidency of the EU Council in the second half of 2020. However, Kolak also said it is important that EU-wide rules, such as a taxonomy for sustainable investments, remains "clear, lean and easily applicable in practice." With its proposal, the council would achieve the opposite and hamper Germany's competitiveness as a finance location compared to other EU countries. Instead of insisting on national rules, the government should rather seek to actively shape the European process and "work towards regulation that is applicable in practice," Kolak said.

The Sustainable Finance Council, which includes representatives from the government, civil society, companies and also from the financial industry, presented its first interim report at the beginning of March. In it, the council lists dozens of measures to make Germany's financial sector more sustainable and competitive, outlining ways the sector can react to international developments in climate policy and how the country can reach its goal of becoming a leader in sustainable finance.