Financing the Sustainability Agenda

In addition, there is the risk that government and corporate debt levels might become unsustainable. The EU has already put forward a green bond framework to finance decarbonisation. Yet a large part of the corporate sector, particularly the small and medium-sized enterprise sector, has no access to this financial instrument. The EU therefore still needs the right mixture of reforms to both unlock private lending and investment and ensure that they stay financially sustainable so that risks do not build up in the financial sector. This paper offers several recommendations for reforms to enhance the financing of such investments by strengthening and auditing EU funds, reinforcing incentives for the transformation and supporting European small and medium-sized enterprises.