Copyright: FNG | FIR | ItaSIF | ÖGUT
Project background
In 2018 the European Commission released an action plan for financing sustainable growth with the aim to reorient capital flows towards sustainable investments. One of the strategies to achieve this goal is to increase the awareness of the availability of sustainable investment products among clients. The Commission therefore decided that firms providing investment advice shall ask their clients not only about their financial goals, but also about their sustainability preferences. The integration of sustainability into investment advisory entered into force in August 2022 and is embedded into the suitability obligations arising from EU Directive 2014/65/EU and EU Directive 2016/97.
Following the amendments, a high demand for qualification on sustainability requirements for financial advisors is expected, because the usual education programmes for financial advisors do not include aspects of sustainability, making it difficult to offer high-quality financial advisory services on sustainable financial products.
The complex frameworks, as well as the available options for explaining sustainability requirements to clients in simple terms, will be a challenge for financial advisors. In addition, the availability of products that comply with current regulation is still limited. Meanwhile, the market for sustainable financial products is developing highly dynamically.
Increasing sustainable financial literacy among retail investors is also necessary from a client’s viewpoint in order to protect them from greenwashing and to enhance their understanding of sustainable investment products.
Project goals and measures
The project team is developing an e-learning tool with a focus on EU regulation in English and German. The e-learning addresses the impact and resulting challenges of the new EU regulations on financial advisors such as the aforementioned frameworks, new product categories and possible ways of integrating sustainability into the advisory process. In order to guarantee a user-friendly knowledge transfer, short films on topics related to sustainable investment will be produced and integrated as well as other interactive elements. The short films will also be available independently of the training course. The target group is financial advisors. They receive information on the regulatory changes, learn about ways to apply them and how to help their clients take informed decisions. This will contribute to high-quality financial advisory processes on sustainable financial products for private and institutional investors. Through the Sustainable Investment Fora (SIF) networks in Germany, Austria, France and Italy financial advisors can be directly reached.
Additional short films will be produced for the target group of private investors. They will learn more about the impact of their investments and how they can invest sustainably. This will contribute to consumer protection as well as potentially increase demand for sustainable fi-nancial products and thus increase redirection of investments to sustainable economic activities.
In order to ensure a broad reach of the e-learning tool and the short films, the project team will organize multi-stakeholder events in Germany, Austria, France and Italy. Thereby, they will raise awareness and educate on sustainable investment in the wake of the MiFID II (Markets in Financial Instruments Directive) amendment. The target group of these events will be private and institutional investors and stakeholders from politics, financial industry, science and civil society.
