24 March 2021

MEP Giegold: 200+ finance professionals call for credible rules in an open letter to the EU Commission

The EU Commission is currently finalising the delegated acts that shape the rules for Sustainable Finance. The so-called taxonomy will determine which financial products and investments can be labelled as green and sustainable and which cannot.

The European Parliament and the EU member states had negotiated for a long time and found a good compromise in the end. But as leaked documents show, the EU Commission is now making a U-turn on the detailled rules under pressure from some member states and plans to weaken the criteria. This would mean that, among other things, investments in fossil gas infrastructure and power plants would be considered Sustainable Finance. Recent information ahead of the meeting of member states in the expert group on Sustainable Finance on 24 March also points in this direction. 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. Scandinavian countries are also demanding changes to be able to label non-sustainable forestry as sustainable. It is to be feared that the credibility of Sustainable Finance will also be damaged in the case of nuclear power and forests.

In an open letter to the responsible Commissioners McGuinness and Dombrovskis, initiated by the financial expert Kristina Jeromin and MEP Sven Giegold, more than 700 signatories, including 200+ experts from the sustainable finance sector, demand credible rules instead of the planned weakening. The EU Commission wants to adopt the delegated acts in mid-April. After that, the Council and the European Parliament would need a qualified majority to reject the drafts – neither can change the texts. The EU Commission is therefore in a decisive position.

 

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

“The signatures of 200 experts from the Sustainable Finance sector are a wake-up call for the EU Commission. The industry wants a strong label for sustainable investments and not a form of fraudulent labeling. Under pressure from some member states, the EU Commission intends to water down the taxonomy rules considerably. Investments in fossil gas must not be given a sustainability label. Only a label with credible rules can set the global standard for Sustainable Finance, which is urgently needed in view of the climate crisis. Europe must lead the way in Sustainable Finance instead of sticking to its fossil past.

The 200+ signatures from finance professionals also show that Sustainable Finance is a win-win situation for climate and the economy. The EU Commission must not turn this into a lose-lose situation. Truly sustainable companies will be penalised if the label also applies to gas investments. The EU Commission should listen to the finance sector and adopt credible rules. Caving in to the individual interests of some member states would do great damage to the growing Sustainable Finance sector.”

 

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Open letter to the EU-Kommission for credible Sustainable Finance rules – open for new signatures:
https://actionnetwork.org/petitions/open-letter-sustainable-finance-rules/

Leak: EU considers expanding role of gas in green finance
https://www.euractiv.com/section/energy-environment/news/leak-eu-considers-expanding-role-of-gas-in-green-finance/

 

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Giegold

© Sven Giegold