7 July 2022 (Berlin): Yesterday's vote in the European parliament favouring the Commission's proposal to label gas and nuclear investments as sustainable risks the integrity of the EU’s sustainable finance action plan, its obligations under the Paris Agreement and will severely hinder Europe’s efforts to adhere to its own European Climate Law, which sets a legally binding target of net-zero greenhouse gas emissions by 2050.
In response to European lawmakers’ decision, CDP’s joint global director for capital markets Laurent Babikian said: “The inclusion of gas and nuclear in the EU taxonomy creates a disordered landscape for sustainable investments, instead rendering it an instrument for greenwashing. The EU taxonomy was meant to accelerate the energy transition by endorsing a list of activities deemed suitable to address climate change transition in line with the 1.5°C scenario, while protecting the environment and the population, with metrics aligned to achieving net-zero by 2050. Europe’s decision provides financial incentives for companies to invest in nuclear and gas resources until 2030 and will delay the transition towards renewable alternatives, which are the only sustainable alternative to address the challenge of achieving our EU climate targets and at the same time ensuring energy efficiency and security.
CDP urges financial institutions, investors and all actors in the capital market to continue to align their portfolios with the goals of the Paris Agreement and the European Green Deal and to make investments that deliver significant additional benefits for climate and nature. Their role in enabling the transition to a net-zero, nature-positive economy is crucial, together with robust compliance, reporting and transparency. CDP’s global data from companies and cities on climate, forests and water security, coupled with the insights and research we develop, helps capital market actors engage with companies and make more informed financial decisions, ultimately helping drive a more sustainable future”.
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