Sustainable Finance and Consumer Protection

Background

Research from the 2° Investing Initiative (2DII) suggests that a majority of retail clients across Europe have sustainability investment objectives. Yet, “sustainable finance” doesn’t play a major role in the Greek and Czech climate action policies. This needs to change in order to implement the reform of the MIFID/IDD regulation which obliges financial advisors to ask about and take into account the sustainability preferences of their retail clients.

Project

To support efforts to implement the reform, the project focussed on both ends of the client-advisor relationship. First, it increased the ability of individual clients to understand, articulate and express their sustainability-related investment objectives. Second, it built the technical capacity of financial advisors and distributors to anticipate, interpret and integrate their clients’ demands into suitable product recommendations.

To achieve these goals, the project employed a variety of measures. Relying on knowledge and research results acquired in previous projects, the project conducted local surveys among 2,000 retail clients on their sustainability preferences. 200 mystery shopping visits provided the potential to audit marketing practices and to review product offers. Furthermore, 2DII provided the online retail platform MyFairMoney for the Czech and Greek market to support retail clients and financial advisors. To ensure continuity, the project organiseed a total of 24 events where results were disseminated with local stakeholders.

Results

Sustainable finance market improvement 

• Significant increase in the capacity of Czech and Greek consumers to articulate sustainability preferences in their investment choices and increased capacity of Czech and Greek financial advisors to respond appropriately to the expression of sustainability preferences by their retail clients (from 7%/10% in 2021/2022 to 33%/43% (in Greece) in 2022/2023). 

Unique research data sets 

• Unique research data sets on the sustainable retail investing markets in Czech Republic and Greece were created comprising: sustainability preferences for financial products (n=2000), financial advice practices (n=123), environmental impact marketing claims (n=165), sustainability profiles of fund products (n=>1400). 

Expansion of project activities to Romania, Bulgaria and Estonia 

• Thanks to the project’s success, 2DII built a consortium for a new EUKI proposal with four new partners in other east European countries (Romania, Bulgaria and Estonia) based on a similar project rational and structure (but enlarged scope including new and update research methodologies, new research databases, training modules for key stakeholders, new impact product databases, a Greenwashingknowledge Hub, an online training hub, an open-source certification program for financial advisors and more). 

Last update: September 2024