[check against delivery]

Good morning ladies and gentlemen,

I’m honoured to be invited by the Climate Disclosure Standards Board to speak to you today.

It is my great pleasure to open this event.

It is clear that we face some daunting challenges as a result of the COVID crisis.

I will talk to you today about sustainable finance, corporate reporting and the Capital Markets Union. These are vital topics in our recovery but also for building the Europe that we want to see. These policies will be key priorities during my mandate.

Two major developments have dramatically changed the finance landscape over the last year

First is the European Green Deal, which is a top priority for the Commission.

The EU is determined to achieve climate neutrality by 2050, to increase the 2030 emission reduction targets, and to implement a set of major reforms on broader environmental objectives.

Second is, of course, the COVID-19 crisis: which has destabilized our economies and our societies, not to mention our healthcare systems.

Some have reacted by labelling “sustainability” as a luxury that’s only possible when times are good.

They say we should postpone action on sustainable finance until the crisis has passed. They see only a “status quo” recovery.

Let me be very clear: the Covid-19 crisis cannot be used as an excuse to delay addressing the challenges of climate change, environmental degradation and biodiversity loss.

We should look at the European Green Deal as a green and sustainable growth strategy that can strongly contribute to our recovery.

[Sustainable finance]

Delivering on the European Green Deal requires mobilising at least half a trillion euros per year of additional investments in the EU. 

These investments will be a source of new economic and employment opportunities, and will help us to recover from the crisis.

The NextGenerationEU recovery package presented by the Commission in May will mobilise 750 billion Euros to help Member States.

President Ursula von der Leyen announced that 37 per cent of NextGenerationEU will be spent directly on our European Green Deal objectives.

And we will take green financing to the next level. The President set a target of 30 per cent of NextGenerationEU to be raised through green bonds.

The financial system will need to provide the financial resources to make the climate transition happen.

But this transition is not yet happening fast enough: the rules of the game must be transformed, to integrate sustainability at every step of the financial value chain.

This is why the Commission is preparing a Renewed Sustainable Finance Strategy for early 2021.

One of the priorities of this renewed strategy will be to strengthen the foundations for sustainable investment.

And the review of the Non-Financial Reporting Directive is crucial.

[Sustainability reporting]

Sustainability is becoming a critical factor in business success. That means sustainability reporting is ever more important.

Some European companies, including many that are participating in this event, are world leaders in sustainability reporting and sustainability performance.

But overall sustainability reporting falls far short of what we need to meet the ambition of the European Green Deal and our sustainable finance agenda.

The report published by the Climate Disclosure Standards Board provides detailed evidence of the shortcomings of current reporting practices.

The report covers 50 of Europe’s largest companies, so the full situation could be worse still. 

According to a public consultation that we ran earlier this year, 70 per cent of users of company reports believe that companies fail to disclose relevant information.

Some 74 per cent have concerns about how reliable the information is. And 84 per cent find that reported information is not comparable between companies.

A broad coalition of stakeholders support change: from trade unions and environmental organisations, to central banks, institutional investors, and progressive companies.

The Covid-19 pandemic has exposed the vulnerability of business to non-financial threats.

It has also exposed the social vulnerability of many workers and citizens, throughout company value chains.

From both perspectives, the result is greater demand for more and better information from companies.

The Commission will put forward a proposal to revise the Non-Financial Reporting Directive in March next year, alongside the renewed Sustainable Finance Strategy.

Our ultimate aim is to put financial and so-called non-financial information on the same footing.

Common financial reporting rules across Europe have been important in developing the Capital Markets Union so far.

Common sustainability reporting rules will be an important step in completing it. 

In revising the Non-Financial Reporting Directive we need to look at many issues, including audit, digitalisation, and what sorts of companies should be subject to reporting requirements.

To help address the digital challenge, the Commission’s new action plan for the Capital Markets Union Action includes the creation of a European Single Access Point.

The aim is to facilitate digital access to the financial, and non-financial, information that European companies report.

Our proposal to revise the Non-Financial Reporting Directive will of course also need to look at the content.

What exactly should companies report?

Increasingly we believe that this question can only be answered by a requirement on companies to use common reporting standards.

That’s why we have asked the European Financial Reporting Advisory Group to explore the development of European non-financial reporting standards.

We look forward to their recommendations at the end of January.

The EU already has an ambitious legal framework on sustainable finance, including the Taxonomy Regulation and the Sustainable Finance Disclosure Regulation.

The Commission intends to put forward a proposal for new legislation on sustainable corporate governance and due diligence.

This creates a set of expectations for company reporting that are specific to Europe.

And it leads us to believe that there needs to be a European solution to the standards question.

At the same time, we need to make progress towards greater global alignment of sustainability reporting requirements.

We will support initiatives that contribute to that goal, while keeping our flexibility to go further and faster in accordance with the EU’s own political ambition.


I want to highlight that deeper and more integrated capital markets are a key factor for future investment needs.

That’s why progress towards the Capital Markets Union is essential to mobilising the enormous investment required to tackle climate and environmental challenges, in addition to challenges related to the recovery.  

CMU has never been more needed than in this pandemic, which is a health crisis, but also is an economic environment with low growth and rising unemployment.

Capital markets can help the economy adjust to sustainability challenges.

Sustainable projects have to find market funding and so benefit from access to a deep and liquid market for green bonds with large active capital market players ready to step in.

Moreover, capital markets can provide targeted funding for firms that aim to innovate or to grow sustainably, which will promote Europe’s global competitiveness.

The new CMU Action Plan is a broad combination of 16 measures to enable the development and integration of capital markets.

Let me point to some of the most important ones:

First, integrated capital markets can provide companies with more equity and equity-like funding, so there is a better overall funding mix.

Given banks’ declining capacity to provide credit and rising corporate debt levels, firms need to tap equity and other capital market instruments for their financing.

More equity funding will also help better absorb the long-term damage of structural shocks, such as a pandemic.

We will continue efforts to reduce the cost of access to capital markets for SMEs.

Second, capital markets must provide citizens with more and better investment opportunities to benefit from the structural changes that our economy is undergoing.

For instance, they should have access to better long-term returns on pension schemes or more resources for a more sustainable and circular economy.

We want to make Europe a more transparent and cost-effective place for retail investors.

That means reducing informational overload, improving the quality of disclosure and increasing the quality of investment advice.

Moreover, capital markets can boost sustainable investments and enable an environment in which large amounts of capital can be mobilised to achieve climate objectives.

Last but not least, capital markets are a priority for the stability of our financial system during systemic shocks, like this pandemic.


Ladies and gentlemen,

Recent news on vaccine trials suggests that there is light at the end of the tunnel.

But, as much as we hope never to experience an event like this again, we cannot afford to be caught unprepared.

When addressing the major challenges that lie ahead, we are faced with some tough choices – especially about where we direct future financing and investment.

I would like to be very clear that the Covid-19 crisis cannot be used as an excuse to delay addressing climate and environmental challenges.

But we can map our way out of the crisis and into recovery.

If we get it right, we’ll embrace enormous transformational opportunities by making sure we channel investments into companies that can deliver on our green and sustainable objectives.

Change is coming.

We need to embrace the opportunities it will bring.

Thank you.