Green Transition: Implementing EU Reforms for Retail Investing

This new green transition project addresses challenges in Romania, Bulgaria and Estonia arising from the new Markets in Financial Instruments Directive (MiFID II) and Insurance Distribution Directive (IDD) Delegated Act, mandating distributors of fund and insurance products to integrate sustainability preferences into their recommendations. 

Earlier research highlights a significant untapped market potential in Romania and Estonia between retail investor demand for sustainable financial products and the market supply. Therefore, this project aims to enhance the flow of retail savings towards sustainable financial products by increasing the sustainable finance literacy of consumers and strengthening investor protection mechanisms through improved market conditions. 

The green transition project contributes to overcoming key hurdles, including the shortage of financial products with high impact potential, misleading marketing claims, and the technical complexity of assessing sustainability preferences from clients. As such, this initiative contributes to the development of a more impactful and resilient financial ecosystem in Europe.

The main activities will be 
– Research on private investor sustainability preferences (e.g. surveys, interviews)
– Research on offering and distribution of financial products (e.g. marketing claims, mystery shoppings)
– Capacity building for supervisors, product manufacturers and distributors (e.g. seminars and trainings)
– Tool development on sustainable finance for retail investors and local stakeholder (e.g. local versions of myfairmoney.eu)  

The project involves collaboration between the following organizations:

• Asso 2° Investing Initiative, France
• Institute of Baltic Studies, Estonia
• Institute of Financial Studies, Romania
• Association of Romanian Financial Services Users, Romania
• Association of Bulgarian Investor Relations Directors, Bulgaria

This project is funded by the European Climate Initiative (EUKI) of the German Federal Ministry for Economic Affairs and Climate Action (BMWK)