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11 political solutions that would make the financial sector more sustainable – recommendations from FFG SWE

Wednesday, May 29, 2019

Two weeks ago FFG Sweden officially launched 11 political solutions that would make the financial sector more sustainable. We presented them in a public opinion in Sweden’s largest newspaper and the day after we organized a panel discussion in the parliament with members of the Committee on Finance. We also have meetings with the Ministry of Finance, the financial supervisory authority and an industry organization.

When developing them our focus has been to come up with concrete and realistic solutions rather than visionary objectives, or just pointing to the problem and asking the politicians to solve it.

The recommendations are divided into three themes:

Increase transparency where the money goes

  1. Modernize the bank secrecy regulation so that bank’s credits to companies are disclosed publicly.
  2. Require financial institutions to publicly disclose all their investments and holdings in a group-wide annual report.

Help consumers make informed sustainable financial choices

  1. Require that financial advisors inform and guide consumers about sustainability aspects in investment decisions
  2. Assign the supervisory authority to develop reporting standards for financial products’ sustainability considerations. One simple for consumers and one extensive for professional readers.
  3. Require financial products to disclose its carbon footprint (scope 1-3) and relate it to science based targets.
  4. Make the Government issue green bonds.

Impose regulations and supervision of the financial sector’s sustainability work

  1. Supervise that financial institutions have sufficient systems and routines to live up to their sustainability commitments.
  2. Require TCFD reporting and that financial institutions show how the financial activities are transformed in line with the Paris agreement.
  3. Require that financial institutions have sufficient systems and routines to comply with the UN Guiding Principles.
  4. Advocate for the realization of all recommendations by the EU Commission’s High Level Expert Group on sustainable finance.
  5. Tighten the regulation and supervision of banks’ prevention of money laundering and tax evasion.

 Background information (in Swedish)

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