An agreement has finally been reached in the European Parliament on a European list that indicates which investments can be called sustainable, the 'green taxonomy'. After weeks of negotiations, an agreement seemed to have been reached with the EU governments two weeks ago, but they threatened to backtrack last week. With some adjustments in the texts, this has now been resolved.
Financial institutions that claim that an investment is sustainable must henceforth prove this based on the European rules in the taxonomy. This combats 'greenwashing' of financial products. Moreover, the agreement provides more transparency: investors can now see what percentage of their financial product is actually sustainable.
If a financial product does not fall under the taxonomy, this must be reported to an investor as a requirement. In this way, steps are being taken to make sustainable investing the norm. "With these definitions, the EU is setting the global standard for sustainable investing. Despite intense lobbying from the business community, this agreement contains ambitious criteria for sustainable investments," said MEP Bas Eickhout (GreenLeft).
A major point of contention during the negotiations was the exact criteria that a sustainable investment must meet. After objections from France, among others, the text regarding nuclear energy was slightly adjusted so that investments in it are not automatically considered non-sustainable.
"We have made history," reacted EU Commissioner Valdis Dombrovskis. According to him, the agreement will lead to a flow of green investments that will help Europe become climate neutral by 2050.
The World Wildlife Fund (WWF) is also enthusiastic about the "robust and balanced deal. This is good news for the many EU citizens, stakeholders, and policymakers who want to move forward, as climate science requires."
Eickhout is pleased with new rules that ensure investments in nuclear energy, gas, and coal cannot be considered sustainable. Eickhout said: "It would be terrible if sustainability requirements were stretched solely to serve national interests. Fortunately, we have prevented Poland from calling coal investments, Germany gas, and France nuclear energy 'sustainable.'"