Investors warn ‘green’ label for gas undermines EU taxonomy

(EurActiv, 4 Feb 2022) Investor groups have criticised the European Commission’s plan to label fossil gas projects as “green” under the EU sustainable finance taxonomy, saying it undermines the investment guide’s purpose of promoting climate-friendly activities.

Fossil gas should not be considered green and labelling it as such will confuse investors, warn the Institutional Investors Group on Climate Change (IIGCC), a powerful coalition of pension funds and asset managers, and Eurosif, a European organisation that promotes sustainable investments.

“It is disappointing that natural gas has been included within the scope of the taxonomy. The taxonomy – which is meant to be the cornerstone of the EU’s sustainable finance agenda – now risks undermining a credible pathway to net zero,” said Stephanie Pfeifer the CEO of IIGCC, whose members manage €50 trillion worth of assets.

“For institutional investors, the inclusion of natural gas sends mixed messages and will negatively impact their ability to align their portfolios with net zero,” she added.

Meanwhile, Eurosif warns that the inclusion of both fossil gas and nuclear energy in the taxonomy will most likely “adversely impact both the credibility and usefulness of the framework for sustainable investors”.

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EurActiv, 4 Feb 2022: Investors warn ‘green’ label for gas undermines EU taxonomy