This week, the EU Commission is finalising the first delegated act to shape the rules for Sustainable Finance. These “taxonomy rules” will determine which financial products and investments can be labelled as green and sustainable and which cannot. Recently, plans by the Commission to significantly soften the original science-based proposals under pressure from member states became known. If enacted, investments in fossil gas or unsustainable forestry, for example, would receive the Sustainable Finance label.
The planned softening of the rules was clearly criticised by the Chair of the Sustainable Finance Platform, Nathan Fabian, in an open letter to the EU Commission yesterday. Together with the other leading members of the Platform, he urged orientation towards scientific criteria instead of political interests. The Platform is the central advisory body of the European Sustainable Finance Project. A fortnight ago, nine members of the Platform had already announced in a letter to the EU Commission that they would reconsider their membership in the Platform if the planned far-reaching softening were to take place.
The European Parliament and the EU states had negotiated for a long time and in the end found a compromise. But now, under pressure from some member states, the EU Commission could do a U-turn on the concrete implementation and weaken the criteria. This would mean that, among other things, investments in fossil gas would be considered sustainable finance. In an open letter to the responsible Commissioners McGuinness and Dombrovskis, initiated by the financial expert Kristina Jeromin and the MEP Sven Giegold, more than 1,000 signatories, including 250+ experts from the sustainable finance sector, demand credible rules instead of the planned weakening. The EU Commission will prepare the decision on the crucial delegated acts this week and formally announce it next week. Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group comments:
“The credibility of the European Green Deal is at stake. Investments in fossil gas must not be given a sustainability label. Ursula von der Leyen and Frans Timmermans must prevent damage to the Green Deal. After the Common Agricultural Policy, the financial sector would be the second economic sector in which the goals of the Green Deal are undermined. If the EU Commission gives way to pressure from individual member states, its ability to enforce the Green Deal will be severely damaged. If the EU Commission already buckles under transparency rules for the financial sector, the climate rules for the car and construction industries will be in even greater danger. The Green Deal is a long obstacle race and the EU Commission must not stumble at the smaller hurdles. The EU should lead the way in sustainable finance instead of keeping one foot in the fossil past. Only a label with credible rules can set the global standard for sustainable finance that is urgently needed in view of the climate crisis. Caving in to the special interests of some member states would seriously damage the growing sustainable finance sector. The industry is protesting against this attack on the credibility of sustainability criteria. Sustainable finance is a win-win situation for the climate and the economy. The EU Commission must not turn it into a lose-lose situation. Truly sustainable companies will be penalised if the label also applies to gas investments. The EU Commission should defend its Green Deal and adopt credible rules for sustainable finance products and investments.”
Open letter from Nathan Fabian, Chair of the Sustainable Finance Platform, to the EU Commission:
Letter from nine members of the Platform for Sustainable Finance to the EU Commission:
Open Letter to the EU Commission – signed by more than 250 experts in the field of Sustainable Finance (keep signing):