6. Product Innovation in the Financial Industry in Response to the EU Action Plan and Green Deal

The chapter delves into the transformative impact of the EU Action Plan and Green Deal on the financial industry, highlighting the emergence of structured bonds as key instruments for sustainable investment. It discusses the stringent requirements set by the EU Taxonomy and the EU Green Bond Standard, which ensure that these financial products contribute meaningfully to environmental and social objectives. Additionally, the chapter explores the creation of new indices based on ESG criteria, which serve as the foundation for a growing range of sustainability-focused exchange-traded funds (ETFs). It also examines thematic equity funds that combine primary and secondary market assets, providing investors with diversified exposure to sustainable investment opportunities. Throughout, the chapter emphasizes the importance of forward-looking risk and impact assessments and the integration of double materiality principles in investment strategies. The detailed analysis of case studies and market trends offers valuable insights into the practical application of these innovations, making the chapter a must-read for professionals seeking to understand the evolving landscape of sustainable finance.