Green Financial Products in the EU – a critical review of the status quo

Center for Financial Studies Working Paper No. 677, 2022

19 Pages Posted: 6 Apr 2022

See all articles by Volker Brühl

Volker Brühl

Center for Financial Studies (CFS)

Date Written: March 24, 2022

Abstract

The financial sector plays an important role in financing the green transformation of the European economy. A critical assessment of the current regulatory framework for sustainable finance in Europe leads to ambiguous results. Although the level of transparency on ESG aspects of financial products has been significantly improved, it is questionable whether the complex, mainly disclosure-oriented architecture is sufficient to mobilise more private capital into sustainable investments. It should be discussed whether a minimum Taxonomy ratio or Green Asset Ratio has to be fulfilled to market a financial product as “green”. Furthermore, because of the high complexity of the regulation, it could be helpful for the understanding of private investors to establish a simplified green rating, based on the Taxonomy ratio, to facilitate the selection of green financial products.

JEL Classification: G10, G20

Suggested Citation

Brühl, Volker, Green Financial Products in the EU – a critical review of the status quo (March 24, 2022). Center for Financial Studies Working Paper No. 677, 2022, Available at SSRN: https://ssrn.com/abstract=4065919 or http://dx.doi.org/10.2139/ssrn.4065919

Volker Brühl (Contact Author)

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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