Sven Giegold
Member of the European Parliament – Greens/EFA Group

Speaker of the German Green Delegation

Greens call on the European Commission to not put the credibility of the Sustainable Finance rules at risk

Yesterday, 24 March 2021, Bas Eickhout, co-rapporteur of the Taxonomy Regulation and Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group have sent a letter to European Commission President Ursula von der Leyen, Vice-President Valdis Dombrovskis, Vice-President Frans Timmermanns and Finance Commissioner Mairead McGuinness. They call on the Commission to refrain from any weakening of the sustainability criteria in the Delegated Act for the Taxonomy Regulation despite the pressure from several member states and industry lobbying. This concerns particularly the inclusion of fossil gas, but also other areas such as forestry or manufacturing. In parallel, more than 250 sustainable finance professionals have signed a letter on the matter initiated by the Greens.

 

MEP Bas Eickhout, co-rapporteur of the Taxonomy Regulation for the Greens/EFA group commented:

“The taxonomy is supposed to set a golden standard for truly sustainable investments that transform the economy towards climate neutrality. When defining sustainability, the Commission should listen to science, not the industry’s and member states’ wishes to paint the status quo green. If this Commission takes its own Green Deal ambitions seriously, it must reconsider the criteria.”

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“Weakening the sustainability criteria in the Taxonomy puts the whole European Sustainable Finance agenda at risk. Investors and financial market players are demanding a reliable and credible standard for sustainability. In the current jungle of green finance claims, this is urgently needed. The proposals of the Commission threaten to damage the credibility of the Taxonomy severely. A Taxonomy firmly rooted in science and the goals of the Paris Agreement could boost Sustainable Finance in Europa and become an international benchmark. Nobody is waiting for a Taxonomy that reflects a lukewarm compromise of the vested interests of European member states rather than science.”

 

Background:

The European Commission will adopt the final Delegated Act on 21 April 2021 and is currently finalising its drafting. As documents leaked this week revealed, the latest draft deviates severely from the original science-based criteria. This comes after massive lobbying by some member states. Under certain conditions, investments in fossil gas infrastructure and power plants would be considered sustainable. After adoption by the Commission, the Council and the European Parliament would need a qualified majority to reject the drafts – neither can change the texts.

Later this year, the Commission will also make a proposal on how it will deal with nuclear energy in the Taxonomy. Commission expert groups are currently working on an assessment of whether the radioactive waste generated constitutes an exclusion criterion for the Taxonomy.

The Taxonomy is the centerpiece of the European Sustainable Finance Agenda. It is a classification system that labels economic activities either sustainable or not. The details of this classification have to be defined by the EU Commission in Delegated Acts via the so-called technical screening criteria. When the Commission presented its first draft in November, it built on the science-based advice it had received from the Technical Expert Group on Sustainable Finance. As analysis by the Greens/EFA showed, already this first draft had deviated from the scientific advice in many areas.

 

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Letter to the European Commission by MEPs Bas Eickhout and Sven Giegold:
https://groenlinks.nl/sites/groenlinks/files/2021-03/letter-gas-taxonomy.pdf

Letter by 250+ sustainable finance professionals for credible rules for the EU Taxonomy:
https://actionnetwork.org/petitions/open-letter-sustainable-finance-rules/

Detailed comments on the Delegated Acts by the Greens/EFA group sent to the European Commission in December 2020:
http://extranet.greens-efa-service.eu/public/media/file/1/6699