The European Council has been deliberating with the European Parliament, which comprises heads of European Union (EU) states, on implementing a classification system, known as the EU taxonomy for sustainable investments, into all EU legislations. Consequently, at an Economic and Financial Affairs Council meeting that took place recently, the EU finance ministers endorsed the classification system.
The ministers also pledged to help direct private capital to sustainable investments and endorsed the council’s action plan aimed at reducing carbon emissions across Europe by 2030. To accomplish the action plan, the EU estimated that €180 billion ($198 billion) in investments is needed. In addition, the ministers said they would continue to engage with each other on issues such as sustainable finance, green budgeting, carbon pricing, green taxation, and environmentally harmful subsidies.
Responding to the political agreement, Fiona Reynolds, CEO of the United Nations Principles for Responsible Investment, said in an emailed comment that the classification system underpins disclosure requirements and bridges the gap between the 2015 Paris Agreements and investment practices.
Tanguy van de Werve, director-general of the European Fund Management Association, said in an emailed comment that the association supported the EU’s political objective to fight climate change and meet the goals of the Paris agreement. Mr. van de Werve, in addition, stated that the investee companies should disclose all key data needed to evaluate the investment against the EU taxonomy.
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