Leaseurope has released an insightful new paper detailing the crucial role of leasing in facilitating transition finance. As Europe navigates the path to sustainability, transition finance, which supports industries in shifting towards greener practices, is becoming increasingly significant. Leaseurope's paper presents high-level proposals for measuring and reporting this type of finance, ensuring that it receives appropriate recognition in the broader framework of sustainable finance.
Transition finance is essential for industries making substantial changes towards sustainability but not yet fully aligned with green finance standards. Leaseurope’s paper emphasizes that, in the short to medium term, transition finance will play a more substantial role than green finance in Europe.
The paper advocates for the inclusion of all forms of transition finance, including both finance and operating leases, in the sustainability reporting requirements for banks and financial institutions. This is crucial for supporting European SMEs and larger businesses in their sustainability journeys. The proposals align with emerging EU definitions of green loans and future European Sustainability Reporting Standards.
By highlighting the role of leasing in transition finance, Leaseurope underscores the need for banks and other financial providers to continue supporting businesses. This support is vital for enabling companies to invest in green transition projects, ultimately contributing to broader environmental goals.
Leaseurope’s new paper is a significant step towards recognizing and promoting the role of leasing in transition finance. It offers a clear roadmap for measuring and reporting this type of finance, ensuring it plays a pivotal role in Europe’s sustainability efforts.
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