Labour rights and sustainable finance
Over the past year, NFU has taken important steps to empower finance employees and strengthen finance’s role in society as the EU formulates its agenda for sustainable finance. The fight for minimum safeguards for human rights and labour rights in the green transition however, continues to be met with resistance.
President Juncker moved sustainability to the top of the agenda with his State of the Union address last year. NFU has since stepped up its game to ensure that the otherwise squeezed social factor is given scope and importance within the framework of sustainability. The ESG-integrated approach (environmental, social and governance factors) makes the green transition both efficient in implementation and sustainable in outcome. At a minimum there must be conditions and safeguards for human rights and labour rights. Yet, the social objectives are, and continues to be, lacking in political support, and they are often met with disquiet.
A polarized issue
Leading up to the first legislative proposal within sustainable growth, the High-Level Expert Group delivered an initial report with recommendations that reduced the social factor to investments in social entrepreneurs. The social factor was described as a hindrance to solving the climate crisis and something that should be approached as a secondary priority by the EU. The result of our campaigning however led to that an additional chapter covering the social factor was added to the report and financial advice becoming a vital perspective of the recommendations. Our worry that inequalities across Europe are increasing, and that much is still to be done to realize the Social Charter, also gained legitimacy in the report. This was key to the social factor’s being or not being within EU’s sustainability framework.
Discouragingly, the Commission later in March delivered an ‘Action Plan for Sustainable Growth’ which tabled any legislative initiatives on the social factor until the earliest 2021. The Action Plan prescribed an urgent need for developing a perfect green taxonomy that should not be distracted, hindered or robbed of focus by the social objectives. Even though considerable evidence had been provided in support of an ESG integrated approach being the most efficient and the most sustainable.
The centre-of-gravity shifts
After additional campaigning by NFU, the benefits of an ESG integrated approach where however recognised, which resulted in a legislative package proposal on sustainable finance on May 24 that did take the social factor into consideration. The package delivers amendments which will provide finance employees with a stronger mandate.
The proposal mainstreams ESG sustainability in financial risk management and advice. In placing special importance on financial advice as a means for the green transition, financial employees are recognized for their key role and expertise in helping to deliver sustainable finance. In addition, labour relations and employee relations will from now on be treated as investment preferences. A longstanding wish also from clients.
Trade unions should play their part
NFU’s participation in the high-level dialogue of shaping the EU approach to sustainable finance has been invaluable for the integration of ESG factors and for establishing minimum safeguards for labour rights in investments. However, the process also illustrates that human rights and labour rights are not per see perceived as fundamental aspects of sustainability. Therefore, trade unions have a key role to play in the reorientation of European capital in a sustainable direction, and NFU will continue to stay at the forefront of those efforts.
Emelie Weski, Head of EU Affairs