As Europe confronts the twin challenges of addressing the climate crisis and building resilient economies, the role of capital markets is central. The European Union’s ambition to integrate capital markets offers an opportunity to direct financial flows towards sustainable and resilient economic activities. However, without a clear roadmap, these efforts risk falling short of delivering the transformative change needed to achieve Europe’s climate and sustainability goals.
To ensure capital markets contribute effectively to the transition, systemic changes are required. Financial institutions must integrate sustainability risks into their strategies and operations, while policymakers establish robust incentives to reward sustainable investments and disincentives to deter unsustainable practices. Crucially, coherence across the EU’s sustainable finance framework and alignment with broader EU climate and development objectives will be essential to maintaining focus and achieving impact.
To ensure success, robust policies must be implemented to enable banks, investors, and other capital market actors to actively support the transition. At the same time, safeguards must be in place to prevent the financing of activities that undermine the EU’s climate and economic objectives.
Recognising this important moment, WWF EU, ShareAction, and E3G have collaborated to produce a comprehensive briefing. This document outlines actionable recommendations to align Europe’s capital markets with the scale and urgency of the climate crisis. By adopting these measures, the EU can ensure that capital markets become a powerful driver of the systemic changes required to deliver a climate-safe and sustainable future for all.
