A Competitive Advantage for a Resilient Europe – Part II

Oriane Schoonbroodt
1 day ago
4 min read

Updated: 7 hours ago

From architecture to infrastructure

Label R is proud to announce the completion of Part II of A Competitive Advantage for a Resilient Europe, developed as a continuation of the Eurosif report on EU sustainable finance.

At the heart of this second report lies a simple but demanding question:

Can Europe reduce sustainability reporting time by up to 90%, without excluding 90% of companies from the framework?

This is not a rhetorical provocation. It is the organising principle of the report.

90% Faster. 100% Framework.

Europe has built the world’s most ambitious sustainable finance architecture.

Now it must make it work at the speed markets demand.

Part II starts from a clear observation: the challenge Europe is facing today is not one of ambition, nor of regulatory intent. The architecture is largely in place. The problem is that the infrastructure required to operate that architecture efficiently, predictably, and at scale has not yet been completed.

Over the past decade, the EU has created a highly integrated information system for sustainable finance. Through the EU Taxonomy, CSRD/ESRS, SFDR, and CSDDD, Europe has set clear rules on what counts as sustainable activity, how companies disclose impacts, how investors classify products, and how due diligence is enforced. Each regulation targets a specific market failure: information asymmetry, externalised risk, or fragmented incentives. Together, they form a coherent system that markets can trust.

This architecture has already delivered tangible results. Capital flows, cost of capital effects, and macro-level modelling all point in the same direction: the real cost is not the cost of transition, but the cost of inaction. Sustainable finance, when credible and coherent, strengthens competitiveness rather than undermining it.

And yet, the lived experience of implementation tells a different story.

The missing layer: from architecture to infrastructure

The focal point of this report is that while the architecture for sustainability has been built, the infrastructure required to make it work efficiently at scale is still missing.

Across Europe, numerous pilots and initiatives have emerged to address this gap: digital reporting tools, supervisory experiments, assurance innovations, behavioural approaches to governance, and public-private platforms. The ecosystem is rich in experimentation. But it remains fragmented, uneven, and insufficiently connected.

As a result, reporting has become slow, repetitive, and costly, not because the framework is conceptually flawed, but because the delivery system has not kept pace with its ambition.

Part II therefore focuses on how this missing infrastructure can be built by combining:

Digitalisation, to streamline workflows and reduce manual repetition
Behavioural design, to make reporting usable, repeatable, and decision-relevant
Assurance innovation, to maintain trust as automation and AI accelerate reporting
Strategic foresight, to ensure the system can adapt predictably as risks, technologies, and business models evolve

Strategic foresight plays a critical role in this missing layer. Without mechanisms to anticipate structural change, systems can only adapt through reactive regulatory revisions or scope reductions. Foresight enables predictability without rigidity. It allows the framework to evolve over time while preserving coherence and trust.

At a deeper level, what emerges from this analysis is that governance, resilience, and sustainability are not objectives in themselves; they are capacities: the capacity to last, to absorb shocks, and to adapt in an uncertain world. A capacity without infrastructure, including foresight, remains largely theoretical.

Why simplification through scope reduction is a dead end

Recent policy decisions, including the Omnibus Simplification Package, reflect a legitimate concern: reporting friction has become too high for too many companies. Narrowing scope relieves pressure in the short term. But it also creates structural risks.

When scope is reduced, Europe loses comparability, supply-chain traceability, investor visibility, and the data logic that underpins the entire system. Information becomes uneven. Markets become less transparent. Prices become more volatile. Credit becomes more expensive. SMEs lose their position within integrated value chains. Ultimately, consumers and workers bear the cost.

Most importantly, reducing scope weakens the information coherence that makes sustainable finance economically valuable in the first place. Without consistent data across companies, markets lose confidence and the Single Market loses one of its strategic advantages.

There is a better path.

From compliance to strategic capital

The EU designed the architecture, but did not yet build the infrastructure needed to make it usable at scale. Without that missing layer, the administrative burden became too high.

The task now is not to dilute ambition, but to build the tools that enable future expansion. By investing in digital, behavioural, assurance, and foresight infrastructure, Europe can restore broader coverage over time while meeting today’s mandate for simplification.

Seen through this lens, financing infrastructure is not a cost.

It is an investment in efficiency, trust, productivity, and long-term competitiveness.

Part II shows how compliance can be transformed into strategic capital allowing reporting to become faster, simpler, and more reliable without weakening the framework that gives it credibility.

What’s in the report

Section I — From Regulation to Competitiveness

How credible and coherent regulation attracts capital, lowers financing costs, and strengthens Europe’s long-term competitiveness.

Section II — How Efficiency Builds Trust

How reducing reporting time by up to 90% can support a 100% framework, making simplification a pathway to broader participation and system-wide integrity.

Section III — The Industrial Strategy Lens

How sustainable finance infrastructure strengthens Europe’s industrial strategies, enabling investment in innovation, energy transition, and productivity.

Section IV — Policy Coherence and Strategic Foresight

How behavioural design and foresight make the system adaptive, reducing friction while preserving resilience in periods of volatility.

Section V — Financing the Transition to Efficiency

The financial instruments that can scale digital implementation and support SMEs and institutions in modernising reporting.

Section VI — Delivering Efficiency Without Dilution

The governance structures, tools, and safeguards that allow Europe to accelerate reporting while preserving rigour and trust.

Section VII — Europe’s Leadership in Sustainable Competitiveness

A forward-looking vision of how completing the infrastructure for a 100% framework can position Europe as the global benchmark for sustainable competitiveness.

Europe has built the framework. Now it must make it work.

By completing the missing infrastructure layer, the EU can unlock the full potential of its sustainable finance architecture, not only for environmental and social outcomes, but as the backbone of Europe’s resilience, productivity, and long-term competitiveness.

You can read the report here: