FEBEA (The European Federation of Ethical and Alternative Banks and Financiers) brings together 30 alternative banks from the EU, SFA being associate member, recently published their position on this new strategy. Social Finance Association (SFA) - FEBEA associate member, and initiator of AFIN IFN SA – the alternative financing institution dedicated to the social economy sector from Romania supports the recommendations comprised in the document, all the more since they are relevant for our country.
Within the European ecologic agreement, the European Commission"financing strategy for the transition to a sustainable economy"on July 6th 2021. The new strategy proposes actions in several fields such as expanding the standards and labels of sustainable development to recognize the efforts of financial institutions throughout the transition period, the importance of financial inclusion to support SMEs, physical individuals and the real economy on its road to sustainability. The strategy has in mind instruments and incentives to ensure that the financing supports the green transition and the principles of sustainable development.
The document elaborated by FEBEA represents the voice of the European movement of ethical financing, with eight recommendations for the European institutions so that the sustainable financing in the EU truly contributes to lowering social inequities and to combating climate changes.
According to FEBEA representatives, the EU agenda on sustainable development is a welcome step towards recognizing the non-economic consequences of the financing activities. Nonetheless, the current framework could be improved in order to promote a wider concept of sustainability.
„With this document, we want to highlight the gaps in the current proposition of sustainable finance as framed by the EU, proposing to integrate some of the practices and approaches linked to Ethical Finance, as understood by dozens of financial institutions active in Europe for at least the last two decades.”,FEBEA representatives said.
Below are the 8 proposals offered by FEBEA for a more efficient strategy of sustainable financing:
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- Foster the assessment of the benefits for people and the planet, along with economic ones, of all financial activities, with a specific focus on the effects of climate change;
- Be strongly linked to the real economy and stimulate long-term commitments, promote and foster financial activities supporting the social economy and financial inclusion of groups at risk, to foster social cohesion and an inclusive growth;
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- Ensure the coherence of all the financial organizations and not the just the sustainability of one product;
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- Include an obligation of transparency and adoption of specific criteria on all the activities of the financial intermediaries, including their governance, destination of profits, remunerations policies;
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- Move towards “sustainability” understood at 360°, including the definition of “unsustainable” activities and clearly defining a social taxonomy;
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- Include representatives of small, community rooted, ethical banks and financial institutions among the stakeholders being consulted for the elaboration of the sustainable finance strategy;
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- Clearly state activities and approaches of financial intermediaries that are not compatible with the sustainable finance definition;
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- Promote transparency and clear communication on what is sustainable finance towards consumers, to facilitate the mobilization of citizens savings that can help finance the ecological transition.
The full document can be consulted here.
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We mention the fact that Social Finance Association (SFA) has recently become an FEBEA associate member. Social Finance Association is an organization without political affiliations, independent and without a patrimonial goal, whose goal is to create, together with AFIN IFN, a framework favoring the growth of social enterprises from Romania.