Feedback reference
Submitted by
Stan Dupre
User type
Non-governmental organisation (NGO)
2° Investing Initiative
Organisation size
Small (10 to 49 employees)
Country of origin


2° Investing Initiative is a non-for-profit, non-commercial organization based in Paris, London, Berlin and New York City. It is the leading research center on climate-related metrics for financial markets globally, and notably lead the EC-funded project "Sustainable Energy Investment Metrics" (H2020) that aimed at defining scientifically what is a "sustainable investment" in energy-related sectors.

2° Investing Initiative has been represented at the EC High Level Expert Group on Sustainable Finance, helped design the Article 173 of the Energy Transition Law in France, and collaborates with financial supervisors both in Europe and abroad on the application of climate scenario analysis on regulated entities investment and lending portfolios.

2° Investing Initiative welcomes the opportunity to comment the proposed regulation on "the establishment of a framework to facilitate sustainable investment".

1) We support the initiative of the EC to categorize economic activities that contribute to climate, environmental and other sustainability-related policy objectives.

2) We would however recommend to EC to conduct this approach in an international context, such as ISO. More broadly, the development and maintenance of a taxonomy is by essence a permanent work-in-progress and would better fit in a standardization initiative rather than in a regulatory approach.

3) We have a major concern with the purpose of the exercice: "establishing the degree of environmental sustainability of an investment". The approach seems to equal increasing exposure of a portfolio to ‘positive’ activities, with investing directly in these activities in the real economy. The approach presents an over-simplified picture of the investment chain, ignoring all intermediaries and the effect related to their activities. As a result, the definition seems to suggest that the ‘investment’ in an investment product (e.g. mutual fund) by a client translates 1 to 1 into an ‘investment’ in an economic activity (e.g. a windfarm). Unfortunately, the reality is much more complex and this shortcut grossly mis-pictures the decision-making process across the investment chain: in most cases, it does not work this way. This problem is further discussed in our responses to the delegated act on the suitability assessment questionnaire and our response to the proposed regulation on disclosure.

4) Finally, the taxonomy is primarily developed to support the development of an EU green bond standard. The attachement provides our analysis and recommendations on the issues related to this initiative.

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