Financing the green transition of the economy: success factors for a European sustainable finance policy

Conference organized by the Federal Council for Sustainable Development of Belgium (FRDO-CFDD), in collaboration with the European Environment and Sustainable Development Advisory Councils Network (EEAC)

CONTEXT AND OBJECTIVE

The urgent need to transform the European economy in order to decarbonise it, strengthen its resilience in the face of climate change and respect the environment is undisputed. This is also important for maintaining its competitiveness. Acting now matters to protect financial stability in the Eurozone as well. It has been shown how inaction by economic players can generate financial risks in the long term (e.g. with the intensification of physical risks), but also in the short term (e.g. in anticipation of an abrupt transition). The social costs associated with the increase in inequalities resulting from inaction must also be taken into account.

However, the cost of the changes required is substantial. At European level, the overall cost of mitigating climate change is estimated at between €620 billion and €1,350 billion per year (between 4% and 9% of European GDP), and the overall cost of adaptation at between €175 billion and €200 billion per year (between 1.1% and 1.3% of European GDP). Both private and public funding will be needed.

The transition of the economy must also take place in a programmed and orderly fashion.  It is not possible for companies to convert overnight to fully environmentally-friendly, resilient and climate-neutral production. Against this backdrop, and in particular as a result of EU’s sustainable finance strategy, a large number of companies have already published net-zero targets and/or are preparing transition plans to gradually transform their activities. Financing the transition will therefore largely consist of supporting the implementation of these plans.

This is all the more important in the EU since, in January 2024, the European Central Bank noted the existence of high transition risks in the credit portfolios of eurozone banks, due to the fact that a significant proportion of their counterparties are still not aligning themselves on a decarbonisation trajectory compatible with the climate neutrality in 2050 required by the EU .

With regard to the green funds marketed in Europe since the SFDR regulation came into force in March 2021, an independent investigation has revealed that they have invested 87 billion dollars in the most polluting industries, regardless of any credible commitment on their part to the transition.

These factors mean that the financial players concerned are also exposed to significant reputational and legal risks. In the case of bonds issued by governments, questions also arise about the sustainable use of funds.

During the conference, we will discuss a number of elements that need to be taken into account to ensure that financing is consistent with both the sustainability of the economy and the maintenance of financial stability in Europe.

The conference will give you a unique opportunity to meet some of the leading experts in the field: Paul SCHREIBER (Reclaim Finance), Gerdie KNIJP (Sustainable Finance Lab), Michel CARDONA (I4CE), Catherine HIGHAM (Grantham Research Institute), Brenda VAN TENDELOO (National Bank of Belgium), Frédéric VONNER (PwC Luxemburg), Grégory SCHNEIDER-MAUNOURY (Défis Impacts), Isabelle CABIE (Candriam), a representative of the European Commission (DG FISMA) (TBC) and a representative of the Financial Services and Markets Authority (FSMA) of Belgium.

Programme

Chair of the conference: Brent BLEYS (University of Ghent)

09:30-10:00  REGISTRATION AND COFFEE

10:00-10:15  OPENING AND INTRODUCTION

10:15-11:15  SESSION 1: FACILITATING THE DEVELOPMENT OF TRANSITION PLANS

• Minimum criteria for assessing the adequacy of a climate transition plan and effective engagement and voting practices | Paul SCHREIBER, Reclaim Finance (Paris)
• What reference scenarios are needed ? | Gerdie KNIJP, Sustainable Finance Lab (Utrecht)
• Q & A

11:15-12:30  SESSION 2: IMPROVING THE SUPERVISION OF FINANCIAL PLAYERS AND PRODUCTS – PART I

• What changes would be needed in financial supervision ? | Michel CARDONA, Institute for Climate Economics (Paris)
• What is the impact of climate litigation risks ? | Catherine HIGHAM, London School of Economics, Grantham Research Institute on Climate Change and the Environment (London)
• Q & A

12:30-13:30  LUNCH

13:30 – 14:15   SESSION 3: IMPROVING THE SUPERVISION OF FINANCIAL PLAYERS AND PRODUCTS – PART II

• Relevant elements of the EU framework | Financial Services and Markets Authority of Belgium (FSMA) (Brussels)
• Q & A

14:15 – 15:30  SESSION 4: PANEL and Q & A

• Fee KIRSCH (EEAC coordinator), Moderator
• A representative of the European Commission (DG FISMA) (TBC)
• Brenda VAN TENDELOO (National Bank of Belgium)
• Frédéric VONNER (PwC Luxembourg)
• Grégory SCHNEIDER-MAUNOURY (Défis Impact)
• Isabelle CABIE (Candriam)

15:30 – 15:45 CONCLUSIONS and CLOSING

PRACTICAL INFORMATION

The conference will take place in person at the Royal Library of Belgium (KBR) - event room Auditorium, Mont des Arts 28 / Kunstberg 28, 1000 Brussels  How to get there

The conference will start at 10:00 AM and end at 3:30 PM. Registration and coffee from 9:30 AM. Lunch will be served at 12:30 PM.

The conference will be conducted in English. No simultaneous translation will be provided.

Participation is free but you must register in advance via this link: https://forms.office.com/Pages/ResponsePage.aspx?id=a8XvBtl3bkmE4Vi_Nw555zh_-pnNXGVPq4gkUCz5TbBUNVIzMEFGVzNZQTFTTkJNOVBCR1FSVkROOS4u

It will not be possible to follow the conference online, but an audio recording, the speakers’ power points and a written report will be available on the website of the FRDO-CFDD after the conference.

Don’t hesitate to share this invitation, especially on social networks - LinkedIn: https://www.linkedin.com/posts/federale-raad-voor-duurzame-ontwikkeling-frdo-_conference-frdo-cfdd-and-eeac-wednesday-activity-7246087802176638978-k7iJ?utm_source=share&utm_medium=member_desktop

If you have any questions about the content of the conference, please contact

Nathalie.Boucquey@frdo-cfdd.be. If you have any questions about the practical organization, please contact Sven.Vermassen@frdo-cfdd.be