Former Prime Minister Alfred Sant has urged caution on proposals on financial services including insurance sectors which could be damaging for small and medium sized industries in Malta.
Dr Sant, an MEP, was speaking during a debate within the Economic and Financial Committee of the European Parliament.
The committee was discussing disclosures that will need to be made public when investments are launched in financial market and how such investments will contribute to future environmental sustainablility through their contribution to renewable energy targets.
The proposal is to extend the rules about how such disclosures are made.
The European Commission is proposing a harmonised EU framework which specifies how institutional investors, asset managers, insurance distributors and investment advisors have to integrate environmental, social and governance risks within their existing procedures, as part of their duty to act in the best interest of clients. They also need to publish their findings.
In his intervention, Dr Sant urged that both the broadening of the proposal’s remit and the introduction of new rules on due diligence being proposed be subjected to a careful impact study with special reference to the operations of small and medium sized firms.
He said one-size-fits-all approaches were likely to simply increase the costs of running financial businesses without contributing anything to the cause of renewable and clean energy.
“Care should be taken to assess the impact, general and particular, of the proposed measures. A significant part of the EU’s financial services are intermediated by SMEs. Moreover, a number of member states, including my own, Malta, basically rely on them for the provision of most services that do not belong to the banks,” he emphasised.
In his reply to Dr Sant, rapporteur Paul Tang agreed that more time was needed to make the proposed transition. He agreed with Dr Sant’s arguments on small and medium sized industries.
A vote on these proposals in ECON is scheduled for November 5.