Alignment of the French and EC Sustainable Finance Action Plans (A.F.F.A.P.)

Description:

An orderly transition to a low carbon and climate resilient economy requires a rapid shift in the capital allocation in the EU. The integration of climate mitigation and adaptation considerations in the financial system is critical to achieve this objective. However, sustainable finance is still an emerging topic, where agreed metrics, standards and labels are nearly absent, and with significant knowledge gaps (experts in finance have limited knowledge on environmental issues and experts in environment often have limited abilities in finance). In this context, the mobilisation of investors on climate remains difficult. 

The main objectives of the A.F.F.A.P. project are threefold:

1. Full compliance: Upgrading the capacity of supervisors and regulated entities to fully implement existing and forthcoming mandatory requirements related to sustainable finance (e.g. climate related- risk analysis, disclosure, product information and integration into financial advice). Sustainable finance quickly needs to become a normal regulatory topic, an area where the rule of law applies, with no excuse related to the lack of capacity, uncertainty on metrics, etc.
2. Level-up the playing field: Increasing the standards regarding the relevance of climate risk metrics and assessment frameworks, the comparability of information disclosed, the evidence provided to back green marketing claims, in order to reach a level that makes those practices solid enough to actually inform investment decisions; and
3. Go mainstream: Combining regulatory reforms, innovative tools and mass communication to get green products out of their niche and into the mass market.

Project information

Lead

Agence de l'environnement et de la matrise de l'energie

Partners

Autorité de contrôle prudentiel et de résolution, France

Autorité des marchés financiers-France Institute for Climate Economics-France 2 Degrees Investing Initiative, France

Commissariat general au développement durable, France

Source of funding

EC, French Ministry of the Environment and ADEME, AFD, NKI, IKI Germany, Swiss government (FOEN), Finance for Tomorrow, Climate Works Foundation, Rockfeller Brother Fund, BPI France, Hewlett Foundattion and CDP funds.