Sirpa Pietikäinen: “Sustainable finance regulation might save the world, if we can solve the challenge of reporting”
Sirpa Pietikäinen, Member of the European Parliament, illustrated the importance of Environmental, Social and Governance (ESG) reporting by comparing it to existing financial reporting standards.
“We do have financial reporting standards for how a company is managed and how effective the leadership is. We don’t accept any fraud on the financial side”, said Pietikäinen. “However, considering the environmental crisis, it’s of far less importance whether the company director steals money from the company than whether the company destroys our future with fossil fuel investments or environmentally detrimental output. That’s why we need environmental, social and governance issues to be reported as well”, she adds.
She was optimistic about the extensive possibilities of sustainable finance regulation and believed it might even “save the world”. However, many challenges need to be overcome in order to achieve the required level of harmonised ESG reporting.
“ESG data must be standardised, reliable, valid, comparable and transparent. The ESG reporting should be part of the Accounting Directive and we need a European platform of standardised ESG data available for investors, the public and the media”, Pietikäinen concluded.
Martin Spolc, Head of Unit of Sustainable Finance at the European Commission, also pushed for a higher ambition level regarding sustainability reporting.
“Because of the European Green Deal, targets are increasing. We need to do better. Despite all the encouraging progress we see in the market, the pace of the progress is not matching the challenges we’re facing”, he comments.
He continued by stating that the ambition in the European Union is for the reporting to not only consider the impact of climate change and environmental risks on companies, but also that companies would report on the impact of their activities on the climate and environment.
The backdrop for the discussion was a proposal signed by Hanken together with the Finnish financial sector recommending the EU to take a leading role in the development of an open ESG data register by standardizing companies’ ESG reporting.
MEP Sirpa Pietikäinen hosted the webinar together with Hanken, Finance Finland, Finance Denmark and Finance Norway. Others participating in the discussion were:
- Olivier Boutellis-Taft, CEO, Accountancy Europe
- Rasmus Nikolaj Due Skov, Director, Head of Global Sustainability, Ørsted
- Aleksandra Palinska, Senior Regulatory Policy Advisor, Efama
- Sinne Conan, Director of European Affairs, Finance Denmark
- Esko Kivisaari, Deputy Managing Director, Finance Finland