The European Parliament approved this year, just before the elections, a new package of legislative measures to regulate the banking system, with the aim of establishing a definition of what can be considered "sustainable finance".
We can identify at least three axes around which to make a critical reading of the proposal of the European legislator, which has undertaken this initiative with the objective of recovering the legitimacy of the banking sector, strongly compromised following the financial crisis of 2008.
The first axis concerns the value and effectiveness of policies to promote sustainable financial activities. The new legislation defines a “green” taxonomy that recognizes and supports environmental investments with concrete measures. On this front, the legitimate doubt that animates the confrontation is whether the mere promotion of "green" finance is sufficient to curb investments in unsustainable sectors or if, on the contrary, it could end up facilitating greenwashing strategies by financial operators - which will continue to invest mainly in sectors with negative impacts on the environment, leaving a purely visibility role to sustainable finance.
The second axis on which the legislation is built, and which requires reflection, is the choice to isolate environmental impacts from social ones. The exclusion of social impacts from the definition of sustainable finance ignores the incontrovertible fact that the ecological question is intimately related to the social one. The current European legislation proposal seems to trace a path towards a potentially sustainable but absolutely unjust society.
The third axis is an old issue that clearly emerged among the causes of the 2008 crisis: the asymmetries of power and information between the financial services provider and the customer, with the inevitable consequences on the customer's right of informed choice. From tax practices adopted by financial institutions, to the content of information addressed to customers, to the very nature of financial products, whose increasing complexity makes an adequate understanding of costs enormously difficult. It is certain that some of these elements, in particular those relating to tax avoidance and the massive use of tax havens, require specific regulations, which, in many cases, should be adopted on a global scale. The proposal for European legislation does not favor substantial transparency on these aspects and discriminates against those who consciously want to make truly sustainable choices.
This complex panorama shows once again that talking about sustainability in the financial sphere means focusing on the role of operators, the legislator, but also of consumers.
In this sense it is worth considering the potential of some financial proposals specialized in sectors of great social value: proposals born from the commitment of civil society on the basis of a strong common orientation towards transparency and reporting the non-economic consequences of economic actions.
These proposals have a generative nature and their capacity for development will depend to a large extent on the social impact that they will be able to produce and on the institutional support they will be able to meet.
It is important to highlight how this whole debate is influenced in a decisive way also by the affirmation of Fintech, that is by new models of intermediation proper to the digital economy, destined to profoundly change the financial sector in the coming years. A digital transformation that is not limited to finance and technology, but that requires specific rules yet to be written and that will have to consider what we could define as a new generation of human rights.
The debate on sustainable finance is underway and its evolution depends very much on how our societies will be articulated in the future. Political responsibilities are inescapable, but there is also a clear space for action by citizens and by many social organizations and institutions. A space that manifests itself when we make decisions as professionals, consumers...and even as voters.