6 November 2019

The DG for Employment, Social Affairs and Inclusion mandated Finance for Impact to prepare the guidance for social screening and proofing of financing and investment operations under the InvestEU programme 2012-2027. The results of the study will serve as a basis for the Commission to further examine with InvestEU implementing partners the practical implementation of the sustainability proofing foreseen in the Programme regulation.

The objective of the InvestEU Programme is to promote a coherent approach to financing Union policy objectives and more specifically to mobilize public and private investment operations within the EU, with the view to address market failures and sub-optimal investment situations that hamper the achievement of EU goals regarding sustainability, competitiveness and inclusive growth. As a basic requirement, InvestEU-funded projects shall meet Union environmental and social standards, including labour rights. Beyond that requirement, the InvestEU Programme should support investments to foster sustainable and inclusive growth and greater economic, social and territorial cohesion in the Union.

According to the regulation establishing the InvestEU Programme, financing and investment operations that are above a certain size shall be screened to determine if they have an environmental, climate or social impact and if so, shall be subject to climate, environmental and social sustainability proofing. Sustainability proofing might lead, if needed, to implementation of adapting measures for certain operations with a view to minimize detrimental impacts and maximize benefits on climate, environment and social dimension.

In coming months, Finance for Impact will prepare a benchmark to identify the specific strengths and weaknesses of existing investment related methodologies and procedures used by potential InvestEU potential implementing partners. We will identify case studies relevant for screening and proofing of investment / finance operations. We will also outline different options for a possible InvestEU social impact scorecard providing an overview of a potential investee’s social performance and generating a social investment score. Finally, we will prepare a guidance document to show how social sustainability proofing could operate in practice as per requirements laid down in the InvestEU regulation.