Financing EU Commission adopts sustainable financial taxonomy: “A turning point in financial management,” says Danske Bank

The CEO of Danske Bank estimates that demand for shares and bonds of companies operating in accordance with the taxonomy will increase.

European the commission has adopted a bill on the EU’s sustainable financial classification system, the taxonomy.

Through taxonomy, the EU wants to accelerate the implementation of climate goals by linking the climate and environmental impacts of corporate finance and investment.

The taxonomy defines criteria for which economic activities contribute to climate change mitigation and adaptation.

Senior Vice President, Sustainable Finance, Danske Bank Samu Slotte estimates that the reform will increase demand for shares and bonds of companies that operate in accordance with the taxonomy.

“Regulatory changes are bringing a turning point, especially from the perspective of fund managers, and I believe that demand for shares and bonds of companies that are taxonomically sustainable will increase. This increased investor demand is likely to affect the operations of companies, ”Slotte estimates.

The taxonomy also affects bank lending, but Slotte estimates that these effects are not as immediate as in publicly traded markets.

According to Slotte’s assessment, banks’ competition for financing very sustainable companies will intensify, which will lower the interest rate on green financing.

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