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How to save the scientific integrity of the EU’s green finance taxonomy
(EurActiv, 29 Oct 2021) Decision-makers cannot let economic questions on energy security and cost thwart the scientific integrity of the EU Sustainable Taxonomy, write Elise Attal and Jan Vandermosten.
Elise Attal is Head of EU Policy at the Principles for Responsible Investment (PRI), a United Nations-supported international network of investors. Jan Vandermosten is a Senior Policy Analyst at PRI
It is crunch time for the EU Sustainable Taxonomy; a classification framework developed to help investors direct capital towards sustainable economic activities.
Member states and industry are heavily lobbying to include gas-fired electricity and nuclear energy within the definition of sustainable activities for climate mitigation.
While these sectors may be needed in the short-term to secure energy supply, their inclusion would fundamentally undermine the scientific integrity of the EU Sustainable Taxonomy – the bedrock on which the entire credibility of the EU sustainable finance framework relies.
Policymakers and industry should consider the risks of tarnishing investor confidence in this carefully designed and sophisticated framework aimed at providing long-term certainty.
The EU Sustainable Taxonomy regulation delineates an economic activity as sustainable if it “substantially contributes” to one out of six environmental objectives while at the same time “doing no significant harm” to any of the other five objectives. Screening criteria, based on best performance thresholds and life-cycle analysis, for instance, are under development for each environmental objective by an independent expert group, the Sustainable Finance Platform.
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EurActiv, 29 Oct 2021: How to save the scientific integrity of the EU’s green finance taxonomy
