In the 2023 Strategic Foresight Report, the European Commission estimates the need for additional €620bn investments per year to meet the objectives of the European Green Deal and REPowerEU.1 Those objectives include decarbonisation targets, but also creating a sustainable and competitive economy that protects the EU's natural capital, and the health and wellbeing of its citizens. [...] In 2021, the European Commission launched the sustainable finance strategy,7 building on the 2018 sustainable finance action plan.8 The strategy aims to improve the transparency and credibility of sustainable finance in the EU, enhance the access to finance for businesses and individuals, and increase the resilience of the financial sector. [...] Unprecedented public investments in the green transition through the EU budget and new funding In its 2021–2027 Multiannual Financial Framework (MFF), the EU’s long-term budget, the EU committed 30% of its budget to climate and environmental action – up from 20% in the previous period – aiming to respond to immediate investment needs and tackle the social and distributional dimensions of the trans. [...] With regard to the financial sector, the European Central Bank has warned that unless the EU accelerates its shift towards a more sustainable future, the credit risk for banking and financial institutions in the euro area may double by 2030 relative to 2022.34 The risk of inadequately adapting to the transition is also reflected in the views of large European companies that consider that the prima. [...] To facilitate the channelling of resources to promote human rights and social objectives to the benefit of consumers, workers, and communities overall the next European Commission should: Expand the taxonomy framework to define socially sustainable activities and harmonise terminology and concepts already included in existing provisions to refer to it.
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