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Report

8 Jun 2017

Author:
Friend of the Earth, Global Witness, WWF, ActionAid, Fern, Rainforest Action Network, ShareAction, SOMO

Civil society report calls for strong regulation of financial sector to avoid environmental, social & governance risks

...Companies looking for land to grow crops for industries, such as oil, gas or mining or for housing or infrastructure, rely on finance and loans from the financial institutions we in the European Union (EU) invest in. However, with few rules in place to regulate those institutions, there is little to stop them funding projects that are socially or environmentally damaging. Global Witness, Friends of the Earth Europe (FoEE) and others are campaigning for Europe’s financial regulations to be strengthened with robust Environmental, Social and Governance (ESG) safeguards, to stop investors from propping up companies that are grabbing land, abusing human rights and causing damage to the environment. It is commonly believed that increased regulations will reduce European competitiveness and make financial sector institutions less profitable. This belief holds that companies can keep themselves in check when it comes to their social and environmental footprint. But the reality on the ground tells a very di erent story. EU- based investors are in fact putting themselves at significant financial and reputational risk by operating in regions where there are few guarantees, if any, that land has not been grabbed to make way for development.The Capital Market Union (CMU) relaunch in September 2016 o ers an ideal opportunity to ensure that the EU commits to fully integrating ESG factors into its financial regulation framework...