Europe’s groundbreaking sustainable finance regulations are reshaping the market for sustainable investment, bringing new companies to market, encouraging greater disclosure and setting a benchmark for the rest of the world, according to NN Investment Partners (NN IP).

The EU has led the world in its response towards climate change and environmental degradation, seeking to achieve no net emissions of greenhouse gases by 2050 and to decouple economic growth from the use of natural resources. The need for more sustainable investment is pressing. An additional EUR 180 billion will be needed each year to put Europe on the path to environmental and socio-economic stability by 2030, according to the European Commission. Adrie Heinsbroek, Chief Sustainability Officer at NN Investment Partners shares his insights on the matter at hand:

“Europe’s new regulatory framework for sustainable finance will help spur the transition to a more inclusive, climate-neutral economy. It’s designed to boost market transparency and channel investment to companies that are working to solve our most pressing challenges. For investors, the rules open up a wealth of opportunities to make attractive returns while making a difference.”

“The “Brussels effect” has seen countries around the world starting to adopt rules and regulations similar to those in the EU as global best practice. In emerging markets, where many of the countries most vulnerable to the threat of climate change are located, this will mean European investment can flow more freely into these economies and European investors can reap a greater sustainability return.”

“The framework’s full impact on the sustainable investment market will take time to be realised. While much of the primary legislation is already in place, more detailed rules, known as level 2 legislation, needed to implement the package are still in the works. Nevertheless, the outlook for sustainable investing is clear. Investors who position their portfolios to benefit from the coming changes stand to reap attractive returns over the longer term in addition to making an ever-greater impact in the global effort to build a sustainable future.”