Implementation of the EU Reforms on Retail Investing for the Green Transition

The EU Sustainable Finance Action Plan provides the increasing flow of retail savings towards financing the transition to a carbon-neutral economy and improving investor protection. Since 2022, new EU financial and insurance directives have required all financial product distributors to assess their customers’ sustainability preferences. However, Bulgaria, Estonia and Romania are lagging behind in implementing these directives: There is a significant gap between retail investors’ demand for environmental financial products and their supply and distribution, which particularly affects impact-oriented investors. Financial advisors are not sufficiently trained, and products are often marketed in a misleading way.

The project supported the implementation of the EU Sustainable Finance Action Plan in Bulgaria, Estonia and Romania, with a focus on supervision, product marketing and distribution, and the flow of retail investor savings to finance the transition to a carbon-neutral economy. 

The 2° Investing Initiative (2DII), an independent, non-profit think tank conducting this project, transfered its outputs developed over the past three years to Bulgaria, Estonia, and Romania. Project partners, including the Association of Bulgarian Investor Relations, the Institute of Baltic Studies, the Institute of Financial Studies in Romania and the Association of Romanian Financial Services Users, implemented pilot-tested methodologies for consumer research, mystery shopping and visits, environmental product analyses and industry guidelines. The project built on www.myfairmoney.eu, a European information platform on sustainable finance for private investors and a new greenwashing knowledge hub. These platforms were replicated in the target countries as learning hubs on sustainable finance and greenwashing. 

The project collected comprehensive data on the preferences and capacities of providers and consumers and developed information tools based on this data. Finally, the project monitored the implementation of the EU directives and helped realise unexploited market potential for green financial products in the three target countries.

• Identification of barriers to green investments: The project collected data from 3,600 investors and 114 market analyses. The findings highlight specific barriers to sustainable investing in Europe. They are being incorporated into policy reforms and are steering capital more strongly toward climate-friendly investments. 
• Political Impact: The project ensured that the research findings were incorporated into the European Commission’s revision of the Sustainable Finance Disclosure Regulation. The changes place greater responsibility on financial service providers to ensure transparency and impact-oriented approaches in sustainable investments.  
• Long-term advisory capacities: The project trained professionals and established a certified training platform and online database. Financial advisors and retail investors apply their knowledge of sustainable investment products in practice. This improves investment decisions and supports climate-friendly investments in the long term.