Sustainable Finance and Consumer Protection

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.

A plant grows in a glass of coins. Photo: (c) Micheile Henderson

To support efforts to implement the reform, the project focused 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 organised a total of 24 events where results were disseminated with local stakeholders.

• Greater clarity on sustainability preferences in investments: Consumers in Czechia and Greece were empowered to clearly articulate their sustainability preferences in investments. At the same time, financial advisors were empowered to respond to these preferences in a professional manner. 
• The results show a clearly positive development: the proportion of investors who include sustainability aspects in their investment decisions rose from 7 and 10 per cent in 2021/2022 to 33 per cent in 2023 in Czechia and 43 per cent in Greece.
• Comprehensive data basis with valuable insights: As part of the project, extensive data sets on the sustainable retail investment markets in Czechia and Greece were compiled. These include sustainability preferences for financial products from 2,000 consumers,123 financial advisory practices, 165 marketing statements on environmental compatibility and sustainability profiles of 1,400 fund products. 
• Geographical expansion of project activities: Due to the success of the project, 2DII formed a consortium for a new EUKI project with four new partners in Romania, Bulgaria and Estonia. The project was carried out according to a similar principle and structure, but the scope was larger and the research methods had been updated. In addition, the follow-up project utilised new research databases, training modules for key stakeholders and new databases for environmental sustainability products. Finally, a Greenwashing Knowledge Hub, an online training centre and an open-source certification programme for financial advisors were established.