Nathalie Dogniez, recently appointed as chair of Eurosif--a pan-European network and think tank dedicated to promoting sustainable and responsible investment throughout the continent--shared her vision and strategies for advancing the organisation’s objectives with Delano.

Dogniez is a grand duchy-based independent board director and a former partner at KPMG and PWC in Luxembourg.

Established in 2001, Eurosif conducts research, advocates for policy reforms and offers educational resources to foster the adoption of sustainable investment practices. Through its multifaceted initiatives, Eurosif strives to enhance understanding of the advantages of sustainable investment, catalyse positive shifts in financial markets and support the transition toward a more sustainable and inclusive economy in Europe.

Kangkan Halder: What are your immediate and mid-term plans for advancing Eurosif’s commitments and goals?

Nathalie Dogniez: We are at a pivotal moment as the European Union concludes a political cycle and heads into European elections in June. Over the last six years, many rules have been rolled out and implemented and the EU sustainable finance framework is starting to deliver, both in terms of transparency and capital flows to sustainable investments.

It is indeed a decisive moment to ensure Europe’s ability to meet its climate targets for 2030 and beyond, as the transition towards a sustainable economy requires significant investment, more than an additional €700bn per year for decarbonising only. As the leading organisation representing the voice of sustainable investors across Europe, Eurosif--the European Sustainable Investment Forum--strives for practical, ambitious and implementable rules, supporting the just transition towards a sustainable economy.

But, to achieve the transition objectives, it is essential that EU policy makers maintain the positive momentum on sustainable finance.

Eurosif’s priority is to help policy makers in identifying areas to strengthen the existing framework, addressing gaps and shortfalls but also ensuring usability and accelerating the just transition to a sustainable economy.

From your perspective, what are the main concerns and challenges facing sustainable investment in today’s environment?

The main challenge faced in Europe today is to ensure the financing of the transition to a sustainable economy. It is essential that both policy makers and investors keep their momentum, leveraging on a just transition to drive competitiveness and sustainable objectives as the same time. Companies that will succeed in the longer term are indeed those that have been anticipating the transition. In that context, we welcome the recent vote on the Corporate Sustainability Due Diligence Directive (CSDDD), mandating the adoption of transition plans and human rights due diligence rules for large companies operating in Europe.

For the financial sector, access to comprehensive, comparable and reliable sustainability data is critical to measuring the sustainability of investments, portfolio impact and the effectiveness of companies’ transition plans. Today, the availability, comparability, quality and reliability of sustainability-related data still remains an issue. The European Sustainability Reporting Standards are expected to address these challenges to a large extent in the future. It is hoped that cooperation between standards setters striving for interoperability will result in an increased level of international consistency.

Investors need transparency over sustainability risks and the sustainability impacts of their investments and how their investments contribute to their own sustainability objectives. The Sustainable Finance Disclosure Regulation (SFDR) has initiated the move towards more transparency--it is now time to refine its implementation to bring more clarity to investors, helping them to navigate the complexity of different approaches and products categories.

How do you envision public and investor perceptions changing regarding sustainable finance?

Sensationalist headlines of some press articles or the politicisation of the environmental, social and governance (ESG) debate in the US presidential campaign could be interpreted as changing public and investor perceptions in the EU. But, besides the catchy headline, let’s focus on the facts:

– Investors are more than ever conscious of the importance of addressing climate and environmental challenges and risks and are demanding evidence of sustainability impact measurements.

– The required capital flow to finance the transition needs massive investment from the private sector.

– Investors are fully aware that, in the longer term, companies more advanced in the transition, will be better managing their risks and will outperform the laggards.

I therefore remain confident that sustainable investment is and will remain a strong trend, hopefully to become the mainstream investment approach.

Are there any changes you anticipate that would enhance understanding of ESG and facilitate policy implementation?

In the coming years, we expect a focus on the implementation of the legislations already adopted, and a recalibration of existing regulations, leveraging on the lessons learnt in the first years of their implementation. For example, the SFDR framework should be revised to establish categories of sustainable products underpinned by clear minimum criteria. However, it may also still be useful to address some gaps, for instance regarding the absence of a definition of what constitutes social investments in EU regulation, which could be built for example on an EU social investment standard.

It could also be useful to ensure a minimum level of sustainability-related criteria across benchmarks making sustainability claims, for example via an ESG Benchmarks standard. Finally, we need to consider how to better unleash the power of shareholder engagement to accelerate a transition towards a sustainable economy.