EU issues ‘green finance’ strategy

27 Mar 18

The European Union has unveiled its strategy to reform the financial system in support of a “greener and cleaner” economy.

The agenda includes creating labels for green financial products and establishing a common language for sustainable finance, defining what it is and identifying areas where sustainable investment can make an impact. It also aims to enhance transparency in corporate reporting.

Publication of the strategy is one of the key steps towards implementing the Paris Agreement and the EU 2030 Agenda for Sustainable Development, the bloc said in a statement.

Jean-Claude Junckerpresident of the European Commission said: “Through the ambitious targets set in the historic Paris climate agreement, and the commitment to be a world leader in renewables, Europe is already leading the fight against climate change.

“But to get there, Europe's financial sector must lead the green transition and make our union the global destination for sustainable investment. There is no greater return on investment then a healthy planet and economy.”

The EU and governments around the world have committed to ensuring a more sustainable economy and to tackle climate change.

The commission under Juncker has pledged to lead the implementation of the Paris climate agreement and the transition to a low-carbon and resilient economy.

To do this, more capital for green and other sustainable projects is needed.

The funding gap to achieve the EU climate and energy targets by 2030 is estimated at €180bn each year.

Valdis Dombrovskis, EU vice-president responsible for financial stability, financial services and capital markets union, said: “Europe is proud to be leading the global fight against climate change, just two years after the signature of the Paris Agreement.

“But to reach our commitments for emissions reductions, we are faced with a considerable task: we have a yearly funding gap of around €180bn to fill.

“Public money alone will not be enough for this. The financial sector will have to throw its full weight behind the fight against climate change. This is a challenge, but also an exceptional opportunity.”

Our international reporter Simone Rensch finds out why green bonds are going from a marginal financing tool to becoming mainstream.

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