sustainable finance: Olivier Brien, Global Business Development Manager, Lending at Finastra

One year ago, the EU’s Corporate Sustainability Reporting Directive (CSRD) entered into force, marking an important milestone in ESG reporting. At the beginning of 2025, nearly 50,000 companies in Europe will have to disclose ESG information on the impact of their activities.

At COP28, the European Commission announced that the next step would be to create reporting standards for small and medium-sized enterprises. Applying the standards will allow SMEs to respond to requests they receive from large companies, banks or investors, and have access to sustainable finance products.  The European Commission also aims to regulate ESG ratings to enhance transparency and comparability by providing valuable information for investors and other stakeholders.

The Basel Committee has also proposed changes to its Basel 3 framework, which include climate disclosure rules for larger banks. The proposed changes will be implemented from January 2025 and aim to improve bank risk management and practices related to climate-related financial risk.

Moreover, the European Green Bond legislation came into effect a few months ago with the aim of fostering the funding of sustainable projects and enhancing coherence and comparability in the market. The regulation is expected to be implemented from November or December onwards and will mark another milestone for sustainable finance. These initiatives are essential for achieving sustainability and will help us better understand what green really means.