Paul Tang (PvdA): ‘’It is also the responsibility of the financial sector to invest in solar panels, green energy and a just society. Banks, insurance companies and pension funds will have to disclose how they include environmental, social and governance risks in their decision making process.’’
This in response to the new agreement struck in the early morning between the European Parliament and the Council on sustainable investments. The agreement brings more disclosure from the financial sector on private investments and their impact on sustainability in a broad sense. According to Paul Tang, negotiator on behalf of the Parliament, this deal is an essential step to redirect private investments to save our planet and protect its people.
Paul Tang led the negotiations and pulled the member states from a position of limited disclosure to full disclosure for large financial institutions.
“Investments in coal or weapons and investments with unacceptable working conditions must be reconsidered and this deal allows consumers and end-investors to do so. Therefore, this deal is a necessary change in the financial sector in which short-run return is still a dominating factor”.
The European Parliament also secured that the due diligence is introduced and further developed, which asks from financial institutions not only that they identify negative sustainability impacts but also have a policy to avoid or mitigate these impacts. This provides a basis to make financial institutions responsible for not just profit but also for people and planet. According to Paul Tang: ‘’We need responsible institutions to fight poor social working conditions and to get private investments in line with the Paris agreement’’.
The European Parliament considers this an essential first step. However, the European Parliament states that more steps are to follow to give the financial sector broad, long-term perspective and to make this sector work for the people.