Platform on Sustainable Finance intermediate report on monitoring capital flows to sustainable investments

The Platform on Sustainable Finance, an advisory body to the European Commission, has been tasked with developing a methodology for monitoring financial flows into sustainable investments, examining trends, particularly between financial and non-financial entities, and conducting and publishing first analysis based on this methodology and available data.

The purpose of the intermediate report on “monitoring capital flows to sustainable investments” published today is to propose an architecture to measure the effective contribution of finance towards the objectives of the European Green Deal. The comprehensive monitoring framework relies on a rigorous methodology, a data structure, and the mapping of data sources and gaps. The proposed framework integrates a bottom-up representation of the real economy based on entity- and activity-level data, along with financial sector instruments available from primary and secondary markets. As part of this, it considers transition finance for both financial and non-financial undertakings.

The methodology is primarily based on EU sustainable finance regulatory data and definitions, with market standards and definitions complementing the analysis where appropriate. Financing flows to, and investments by, EU economic actors make up the scope for the real economy. This systematic stocktake builds on the early practices that market participants are employing to transition their business models and investments to a net zero and more resilient model, and as documented in the Platform’s compendium of market practices.

The first chapter outlines the conceptual framework underpinning the methodology. The report then focuses on two types of capital flows. The second chapter’s focus is on capital expenditures by real economy entities, which shed light on progress towards filling the investment gaps. In the third chapter, focus is on capital flows into and from financial markets, as this represents an important source of capital in support of real economy investments.

The report is accompanied by a document with annexes, which contains an analysis of the green deal investment gap. This analysis will serve as a reference for the implementation of the proposed framework. The Platform will release a final report at the end of its mandate, which will include any refinements to the methodological approach based on the continued work, an analysis of preliminary data, and a proposal for operationalising periodical monitoring.

The Platform on Sustainable Finance will present the report in a webinar on Thursday 4 April from 14:00 to 15:15.

Related links

• Intermediate report on monitoring capital flows to sustainable investments
• Annexes to the intermediate report
• Platform's LinkedIn
• Webinar on the report

Disclaimer

The documents published here are not official European Commission documents nor reflect an official European Commission position. Nothing in these documents commits the European Commission nor does it preclude any policy outcomes.

The report on “monitoring capital flows to sustainable investments” and its Annexes represent the overall view of the members of the Platform on Sustainable Finance. However, although it represents such a consensus, it may not necessarily, on all details, represent the individual views of member institutions or experts. The views reflected in the report are the views of the experts only. The report does not reflect the views of the European Commission or its services.

The considerations included in the report are compiled under the aegis of the Platform on Sustainable Finance and cannot be construed as official guidance by the European Supervisory Authorities (ESAs). As a result, the views and recommendations do not purport to represent or anticipate any future official guidance and views issued by the ESAs which may differ from the contents of this report.

The inclusion of market practices in the report cannot be construed as their endorsement or validation, in particular for the purpose of assessing Taxonomy-alignment of exposures or use of proceeds by the Platform on Sustainable Finance, the ESAs, nor the European Commission. The market practices described in the annex to the report shall not be deemed to be automatically compliant with the legal obligations under the Commission Delegated Regulation (EU) 2021/2178 or other relevant EU legislation or Commission guidance documents.

The inclusion of KPIs in this report cannot be construed as their endorsement or validation, in particular for the purpose of assessing Taxonomy-alignment of exposures or use of proceeds by the PSF, the ESAs, nor the European Commission.