A harmonisation of regulation, new investment vehicles tailored to sustainable projects and an industry label for sustainability: just a snapshot of MEP and member of the German Green party Sven Giegold’s vision for a greener future for investment management. The call for action came during a conference organised by KPMG at the Luxembourg Chamber of Commerce on 16th April, where over 100 industry players gathered to hear Mr. Giegold’s take on ‘What needs to change in the asset management industry?’.
“We need a standard that consumers know and trust”
For Mr. Giegold, the asset management industry would have to play a pivotal role in his version of a sustainable future: ‘We have a continent searching for growth and only the financial sector can provide the necessary resources. The Greens are interested in ethical sustainability but we want more products which are aimed at financing this. There are already products on the market but there’s still some confusion about what sustainable actually is. We need regulation: the time is now right to have a label defining what sustainable investments means. We need a standard that consumers know and trust’.
“Sustainable finance is close to my heart but there’s currently no framework in place”
KPMG Luxembourg’s Nathalie Dogniez shared the MEP’s enthusiasm for the project, as well as his reservations about the suitability of existing vehicles: ‘Sustainable finance is close to my heart but there’s currently no framework in place. For the moment, sustainable funds either fall under AIF legislation, where reporting is very onerous, or there’s the coming EUSEF, but the scope is narrow.’
‘Luxembourg has the right to a large-sized banking sector: Europeans should refute those that say otherwise’
Sven Giegold also touched on other topical issues for the country, praising Luxembourg for opening the door to the Automatic Exchange of Information criticising comments made about smaller EU countries over-specialising in certain sectors. According to Sven, ‘Luxembourg has the right to a large-sized banking sector: Europeans should refute those that say otherwise’
“There’s a problem with how we do financial legislation in Europe”
Debate also centred around the number of regulations coming out of Brussels in rapid succession. For conference panellist Rafik Fischer of KBL European Private Bankers, the situation was ‘unworkable, it’s becoming impossible’. Sven Giegold acknowledged “a problem with how we do financial legislation in Europe” and called for a more consistent approach and a European Code of Financial Regulation. Until such harmonisation is achieved, however, the fund industry will have to continue pedalling fast to keep up with the relentless pace of change.
Further details regarding the consultation initiated by Mr. Giegold on the subject of the European Code of Financial Regulation can be found on his website.