Wednesday

21st Feb 2024

Chief EU advisor warns of 'transition-wash' on taxonomy

  • The EU needs to be able to better differentiate green investments from other dirtier undertakings (Photo: Skaja Lee)
Listen to article

The European Union should update its green investment rulebook, to make sure EU companies move towards sustainable production methods, Nathan Fabian, the European Commission's chief scientific advisor said on Monday (28 March).

The so-called taxonomy for sustainable investments is the classification system meant to channel investment into environmentally-sustainable sectors.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It forms the financial backbone of the EU's Green Deal climate policies, but it has come under fire recently after the commission decided to also label some gas and nuclear energy projects as green investments.

In a report to be published on Tuesday, , the commission's chief scientific adviser presented a new labelling system with three colours — red, amber and green — to distinguish more clearly environmentally-harmful economic activities [red], from transitional [amber] and sustainable [green] activities.

"Without clear coherent definitions, there is a growing risk of 'transition-wash'," Fabian said, referring to a decision by the commission in February to label gas and nuclear energy as green investments.

However, some criticised this new proposal — to have a more differentiated system — as too ambitious.

"We are well past the point of only increasing transparency for investors. The platform seems to try to impose its own moral code on society by dividing the entire world into good and bad," Markus Ferber, MEP for the centre-right European People's Party (EPP) party said on Monday.

But Nancy Saich, chief climate expert for the European Investment Bank (EIB), who helped write the report, said the red-amber-green "stoplight" system would provide the necessary "clarity to investors."

"It is not just about 'green and not green'," Saich said. "The inclusion of amber [and red] would show how much the economy still needs to do to move away from really harmful levels of performance."

She also said the stoplight classification system should be extended to all environmental goals. In its current iteration, the taxonomy prioritises emissions-reduction.

In the future, a green label will have to include proof the company is on track with all environmental goals as defined under Green Deal, the EU's landmark climate policy.

These include sustainable land and water use; pollution and the protection of biodiversity and ecosystems and climate adaptation, which means companies need to be prepared to handle the effects of a changing environment like floods, rising sea levels, droughts or fire.

Green label for gas may be coming unstuck

The European Commission on Tuesday defended labelling natural gas as a sustainable investment during a session at the European Parliament. Sceptical lawmakers said demand for gas is strong enough.

EU gas and nuclear rules derided as 'biggest greenwash ever'

Experts and activists have warned the European Commission that including natural gas and nuclear power in its plan for sustainable finance will lead to further greenwashing, split financial markets and undermine the bloc's climate objectives.

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Opinion

'Crying wolf' win for chemicals lobby at Antwerp EU meeting

EU politicians will cosy up with Big Toxics at a secretive event on Tuesday to discuss a new 'European Industrial Deal' — a blatant showcase of corporate capture and an attempt to shift the political agenda in a profit-minded direction.

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Latest News

  1. EU's €723bn Covid recovery fund saw growth, but doubts remain
  2. Von der Leyen rejects extremist parties, leaves door open to ECR
  3. Russian oligarchs failed to get off EU blacklist
  4. Podcast: Navalny, Ian Bremmer and "more Europe"
  5. Only Palestinians paying thousands of dollars leave Gaza
  6. Ukraine refugees want to return home — but how?
  7. African leaders unveil continent-wide plan to buy medicines
  8. EU urban-rural divide not bridged by cohesion policy, report finds

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us