Posted on February, 02 2022

The new rule undermines significant progress across the sustainable finance industry and is a major set-back for EU leadership. This rule must be rejected by the EU Parliament, says WWF

(2 February 2022) - The European Commission published a set of sustainable finance rules which does damage to the EU and global environmental action. With the final Delegated Act, the Commission is officially classifying fossil gas and nuclear power as environmentally sustainable under the EU Taxonomy - the EU’s “green” investment guidebook.  

This new determination sets a green benchmark that lags behind the existing green bond market, which excludes gas and nuclear, and risks directing billions of euros towards these environmentally harmful industries labeled as “green”. Only last week, the European Commission’s scientific advisers on the Taxonomy disagreed with the Commission’s proposal, saying that it was “not in line with the Taxonomy Regulation,” and posed a “serious risk of undermining the sustainable Taxonomy framework.”

The Commission’s proposal is meant to flesh out the details of the otherwise robust EU Taxonomy regulation, whose Article 19 requires the Taxonomy criteria to be built on science, not give special treatment to certain technologies, and be easily verifiable. However, the new gas and nuclear criteria violate each of these requirements and so are inconsistent with the regulation. 

Manuel Pulgar-Vidal, WWF Climate & Energy Global Lead said: “This final Delegated Act is not consistent with science, is not consistent with the recommendations of the experts across industries that have been working to shape this taxonomy, it undermines the EU’s global leadership, and risks undermining the global economic transition we so desperately need to avoid the worst effects of climate change.

“The new principles, decisions and actions of the climate and nature debate framed under the concepts of transformational change, Net Zero and Nature Positive, are defining the new elements of what should be considered green and sustainable, and this decision is not following nor considering those elements.  The global impact of this decision should not  be underestimated, muddying the water for investors, and must be rejected to protect the credibility of the whole Taxonomy and protect progress toward the ultimate goal of a net zero, nature-positive economy.” 
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Margaret Kuhlow, Lead of the Finance Practice, WWF International, said: “The EU sustainable finance taxonomy did not set out to describe all economic activity but to define what is "green". It is disappointing to see the EU relinquish this leadership just as the industry is looking for green standards that can be applied globally. Other markets are moving ahead with stronger standards, sustainability-minded investors are increasing their scrutiny of such definitions, and recent global climate discussions ended with resounding calls for credibility, integrity, and accountability in climate commitments." 

Many investors and banks have already made it clear they do not support a greenwashed Taxonomy [1] - a system that was explicitly designed to identify green economic  activities in a clear and transparent manner for investors. Today’s text is splitting the finance market - against the taxonomy aim to unify markets’ approaches - and will slow down the transition. 

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Notes to Editor
For more information, please contact: news@wwfint.org

Notes:
[1] For example: 

• European Investment Bank May Refrain from Bestowing Green Label on Gas, Nuclear;
• Investors worth €50 trillion call on EU to exclude gas from green finance taxonomy;
• UN Principles For Responsible Investment statement;
• Eurosif statement on risks arising from inclusion of natural gas & nuclear energy in the EU Taxonomy; 
• Net Zero Banking Alliance Germany statement; 
• Dutch Pension Federation Calls for Scientific Nature of Taxonomy to be Preserved.

About WWF
WWF is an independent conservation organization, with over 30 million followers and a global network active in nearly 100 countries. Our mission is to stop the degradation of the planet's natural environment and to build a future in which people live in harmony with nature, by conserving the world's biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption. Visit panda.org/news for the latest news and media resources; follow us on Twitter @WWF_media