The sustainable finance committee, a body nominated by the German government for a legislative period, will renew efforts to fully put into effect a sustainable strategy for the financial sector, including pension funds, in the next four years.
During this legislative period, the committee, called Sustainable Finance-Beirat, will primarily support and advise the government on implementing and reinforcing its sustainable-finance strategy, said Silke Stremlau, member of the managing board at the occupational pensions provider for the non-profit sector Hannoversche Kassen, and nominated by the ministries to chair the new body.
The Sustainable Finance-Beirat will certainly focus on topics relating to transforming financing flows, EU regulation and aligning the financial system to the goals of the Paris Agreement and the Sustainable Development Goals, she added.
The Beirat – a working group of experts from finance, real economy, science and civil society industries who advise the government on its sustainable-finance strategy – published a report in February last year with 31 recommendations to build a sustainable financial system.
In May the government outlined a strategy with five goals and 26 measures to transform the economy. The measures include making progress on the EU taxonomy, strengthening non-financial corporate reporting, reinforcing supervisory activities through BaFin, and developing indicators to analyse progress in sustainable finance in the medium term, among others.
“This was passed by the old government in May last year, but not much concrete happened after the election,” Stremlau said, adding that time was spent building the new government and then the war in Ukraine started.
The sustainable-finance committee recommended including specific asset classes in the regulation for investments of pension funds, such as infrastructure, which is important in the context of financing the transformation of the economy but is not considered an independent asset class, it said in the final report.
“It remains to be seen which exact topics with regard to pension funds and sustainable finance will be suggested by the new committee,” Stremlau said, stating that it would also depend on the views of members.
She added: “The coalition agreement already suggests that it should be easier for long-term investors, such as pension funds to invest in sustainable infrastructure. This would be important to achieve climate goals and to ensure that investments are more profitable. I would like to continue working on this [topic].”
Stremlau has been nominated by the ministries involved to chair the body and the committee members will elect the chair and the deputy chair on Friday.
The 34 members of the Beirat appointed by the government include Claus Stickler, managing director of Allianz Investment Management, Michael Menhart, chief economist of Munich Re, Gerald Podobnik, CFO corporate bank at Deutsche Bank, among other members.
“I am really looking forward to my new task,” Stremlau said. ”I hope that we will advise the government with a strong voice for a sustainable financial market. It’s an enormous challenge, but I’m really looking forward to it.”
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