Climate action that works for you

Yesterday’s high-level event on climate action at the European Commission was meant to reflect on where we stand. While the agenda was packed with institutional insights and political messages, a few ideas stood out to us:

1. Climate action isn’t charity, it’s a global race for competitiveness

Much of Europe’s climate conversation still revolves around cost. We ramble about whether environmental regulation risks undermining our competitiveness and yet, we are watching China outpace the rest of the world in clean-tech and renewables, not because they care more about the planet, but because they understand that first movers in net-zero technologies will shape the future economy and secure energy independence in the process.

Europe isn’t helpless. We’re still the world’s second-largest economic bloc, with enormous purchasing power, an educated workforce, strong values and real potential to lead. However, we need to shift our mindset: climate action is not about sacrificing growth, it’s about safeguarding it. Instead of worrying about how US politics are reshaping the conversation, we need to stop outsourcing our energy, our innovation and our ambition.

2. The green transition is already a competitive market, policy just needs to allow financial markets to keep the pace

One argument kept coming up: we need to “let the market lead” rather than regulate. In reality, the climate market is already profitable. Investors are eager to support decarbonisation, energy efficiency and climate tech. What’s holding them back isn’t ideology, it’s geopolitical instability and legal uncertainty.

The Green Deal was a signal for businesses and many responded, putting money into compliance and innovation. However, if the EU keeps rewriting the rules, investors will simply walk away.

As we heard yesterday, policy clarity is everything. If companies feel that investing in compliance is a gamble, the incentive to lead disappears. And without early leaders, the whole transition slows down. The most devastating consequence of backpedaling isn’t reputational it’s economic.

3. Finance sees the risk

Climate change used to be a corporate social responsibility issue, but today, it’s a material financial risk. Investors don’t need regulators to tell them that physical risks could sink entire portfolios. They see it already in flooding insurance claims, in stranded assets and in supply chain volatility.

ECB Vice-Chair Frank Elderson joked that for once, public regulators and private banks are aligned. If they are all pushing for appropriate sustainability disclosure rules, it’s not out of altruism, it’s because they need reliable, comparable data to price risk and allocate capital.

Which brings us to the real problem: a lack of reliable and comparable data. The recent EFRAG proposal to cut 68% of mandatory datapoints in the CSRD framework raises serious concerns. Yes, arguably the CSRD has too many narrative elements, but scrapping indicators instead of streamlining them risks undoing the very progress we have made. And in any case, businesses are only obliged to disclose what’s material to them.

Without harmonised ESG disclosures, banks will rely on estimations, proxies and generic benchmarks, and that’s not proper risk management, it’s guesswork.

We are always up for a good discussion on sustainability data, policy and finance, drop us a message!