Sustainable Finance

AFME supports members and policy makers in the development of sustainability disclosure regimes which enable the flow of capital to sustainable objectives.

We engage on a wide range of voluntary and mandatory reporting standards, including the EU’s Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy, Pillar 3 ESG disclosures and Sustainable Finance Disclosure Regulation (SFDR), and the UK’s forthcoming Sustainability Reporting Requirements and the Sustainability Disclosure Requirements (SDR) and investment labels regime.

We work with policy makers to ensure coherent and consistent disclosures of climate transition plans across reporting frameworks. We also engage on policies which ensure the credibility and accuracy of sustainability disclosures, such as the regulation of ESG ratings providers and greenwashing guidance.

We support the adoption and interoperability of global sustainability reporting standards such as the International Sustainability Standards Board (ISSB) standards in the jurisdictions we cover. 

Transition finance supports the transition to a sustainable economy by providing capital to companies to enable them to improve sustainability performance, particularly in high-emitting sectors.

A key enabler of transition finance is the use of credible transition plans, which can provide valuable information for banks to understand the decarbonisation trajectories of their clients and identify potential needs or opportunities for financing.

Taxonomies offer a common language and criteria to classify economic activities aligned with environmental objectives, enhancing transparency and comparability.

AFME engages with policy makers and standard-setters on policy and guidance for developing credible transition plans and taxonomies, with the aim of scaling sustainable and transition finance. 

ESG risk management is an important consideration in many jurisdictions’ prudential regulatory frameworks. ESG risks are increasingly being integrated into banks’ risk management processes and supervisory dialogue.

AFME supports members and policy makers to ensure long-term financial stability and resilience through the management of ESG risks.

Sustainability-related finance products, including labelled sustainability finance products, provide financing for businesses and governments to advance their sustainability strategy. AFME supports the development of sustainability-related capital markets products through collaboration with AFME’s policy teams in fixed income, securitisation, high yield and equity capital markets.

AFME publishes quarterly data reports on the European sustainable finance markets, covering bonds, loans and securitisation. 

Sustainability due diligence aims to address adverse sustainability impacts coming from organisations’ value chains, including those related to human rights and the environment.

AFME supports members and policymakers in developing proportionate, effective sustainability due diligence regulation and guidance which takes into account the unique role of financial services.

Carbon markets have an important role to play in ensuring an efficient transition to a lower carbon global economy. AFME promotes the development of high integrity compliance and voluntary carbon markets.