The European Commission’s incoming finance head said she will tackle greenwashing and deepen the capital markets to encourage green investment in the region.
Maria Luís Albuquerque, who is expected to become commissioner for financial services, financial stability and the Capital Markets Union in December, answered questions from the European Parliament this morning, as MEPs prepare to vote on her selection.
Asked how she would mobilise pension assets to support the European Union’s climate goals, Albuquerque said: “Private money is needed, so we need to create the conditions for that money to be fully on board […] for these common goals”.
She added later that “without the deepening of the capital markets, we have no fair chance of getting there: not to finance the transition, not to get funding for green activities, not to support the companies becoming green”.
Albuquerque didn’t elaborate on her plans, saying she would provide a more detailed outline towards the end of the year.
“We need to address the fact that in some cases there is greenwashing […] so what we need to do is put the necessary measures in place to make sure that that is prevented and to make sure the framework is appropriately used, and we need to change it accordingly to guarantee that outcome,” she continued.
In her written response to Parliament’s questions, published last month, Albuquerque suggested she would explore the introduction of a categorisation system for financial products, that would provide an alternative to the Sustainable Finance Disclosures Regulation (SFDR).
She reiterated this objective in today’s hearing, acknowledging that SFDR is “being used a pseudo labelling regime”.
“Private money is needed, so we need to create the conditions for that money to be fully on board”
Maria Luís Albuquerque
“We need to address the framework, and the way it’s being misused, by creating a proper categorisation system, so that when one markets or buys a product labelled as ‘green’, or ‘in transition to green’ – potentially, with different scales – people and companies know exactly what is being marketed.”
Mirroring Michael McGrath, the nominee expected to take responsibility for the Corporate Sustainability Due Diligence Directive (CSDDD), who was grilled by Parliament yesterday, Albuquerque dodged a question about whether she planned to subject financial institutions to environmental and social due diligence rules.
She also remained tight-lipped when asked if she would seek to clamp down on financial institutions funding harmful activities.
One MEP claimed ESG exclusions among European investors, which often screen out investments in firms making or selling controversial weapons, had made it difficult for defence companies to access finance.
He argued this is a problem for Europe, especially in the context of growing tensions with Russia, and asked Albuquerque to commit to proposing an amendment to the European Investment Bank’s governing rules to enable it to more freely invest in the arms sector.
In response, she expressed her support for Ukraine in its war with Russia, but added: “On what you mentioned about ESG being a constraint for defence financing, to be honest, at this stage, I’m not fully convinced that that is the issue.”
She said she wanted to “talk to relevant stakeholders” about the challenge faced by defence companies, to see if it was linked to ESG screens.
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