Capacity-building on climate risk management

THE BACKGROUND

Over recent years, the European Commission took important steps to reorient capital flows towards a more sustainable economy. In March 2018, the European Commission adopted the action plan on sustainable finance based on recommendations from the High-level expert group on sustainable finance. Establishing a clear and detailed EU Taxonomy for sustainable activities, proposing an EU Green Bond Standard and strengthening sustainability disclosures are amongst the key actions that are part of the strategic framework, which predated the adoption of the European Green Deal (EGD) and the related European Green Deal/Sustainable Europe Investment Plan (SEIP/EGDIP). The recent adoption of the Commission’s Communication on Strategy for Financing the Transition to a Sustainable Economy in July 2021 provided for a comprehensive account of the key building blocks of the sustainable finance framework. One of the main pillars of the SEIP/EGDIP is the InvestEU programme.

As a result of the policy initiatives briefly described above, financial market participants (including National Public Banks and Institutions or NPBIs) need to comply with several sustainability-related requirements.

THE PROJECT

This project consisted in drafting guidelines, documenting in detail the practical steps that WE and Amerigo Fund need to take for integrating the requirements stemming from EU Taxonomy, InvestEU, Article 8 of the SFDR and other requirements.

THE RESULTS

FINANCE FOR IMPACT advised WE on how to become compliant with existing sustainable finance and climate-related regulations and guidance. In addition, a capacity-building program included the following components: Understanding climate-related risks; scenario analysis and stress testing; TCFD recommendations; GHG accounting methodologies; and regulatory best practices. Finally, FINANCE FOR IMPACT advised WE on how to become a partner to the InvestEU Fund and use EU budgetary guarantees as an implementing partner.