ESG Taxonomies

The host Matthias Catón and his guest Karsten Löffler talk about ESG Taxonomies. ESG stands for “Environmental, Social, and Governance” and essentially means how companies “behave” well as corporate citizens. Taxonomies measure this. The best known is the EU Taxonomy, but as we learn, it is by no means the only one in force or being considered worldwide.

Karsten explains that ESG taxonomies cannot judge “good” or “bad” behavior. They are merely instruments for transparency, particularly for financial investors and banks. They have become mandatory for more and more companies.

While large corporations are mostly well prepared with in-house teams taking care of the necessary steps, many small and medium-sized companies (SMEs) still don’t know what is coming or what they need to do. However, Karsten reassures SMEs. Setting up an ESG Taxonomy framework for a company is less complicated than it sounds and does not necessarily require expensive consultants. Furthermore, once it is set up, the ongoing work is manageable.

Matthias and Karsten also discuss the current geopolitical situation concerning the war in Ukraine and whether it might make sense to postpone the energy transformation of our societies in light of recent events.

About the guest

Karsten Löffler

Karsten Löffler heads the FS-UNEP Collaborating Centre for Climate & Sustainable Energy Finance. Previously working for Allianz Group, he was Managing Director of Allianz Climate Solutions, the Group’s climate innovation hub.

Karsten Löffler is a Certified International Investment Analyst (CIIA) and managing director of the Green and Sustainable Finance Cluster Germany (GSFCG).

He used to represent the GSFCG in the EU Commission’s Technical Expert Group (TEG) on Sustainable Finance, where he actively shaped the EU Taxonomy by applying his extensive experience in renewable energy finance. In October 2020, he became a member of the Commission’s newly established Platform on Sustainable Finance. Furthermore, Karsten chaired the Sustainable Finance Committee of the Federal Government. One of the tasks was to develop recommendations for a Sustainable Finance strategy for Germany.

Executive Briefing – what you should read now

Karsten Löffler recommends the website of the Network for Greening the Financial System.