Expert group recommends setting up European standards for 'green bonds'
An EU sustainability taxonomy, a definition of priority investment areas, the clarification of investor duties and development of "official" European sustainability standards for green bonds are some of the recommendations experts made to the European Commission on Wednesday (31 January).
The EU High-Level Group on Sustainable Finance, whose report was published today, is to put “the EU economy on a more sustainable path”, a Commission official explained.
Against the backdrop of the US’s withdrawal from the Paris agreement, Europe has decided to take a step forward to guarantee that more resources are mobilised towards ‘green’ projects.
According to Standard & Poor’s rating agency, the green bond market is expected to increase more than 30% this year and reach $200bn.
Last year, most of the green bond issuance (around $60bn) came from Europe.
But this is still a drop in the ocean. The 20-member high-level group recommends that the financial sector in Europe integrate further the environmental costs and channel more funds to sustainable finance.
“Our economic model is not functioning as it should,” said Christian Thimann of AXA, who chairs the group.
“The financial sector has a key role to play,” he told reporters on the eve of the presentation of the report.
The Paris Agreement signed in December 2015 acknowledged for the first time the key role the financial sector should play in mitigating the adverse effects of climate change.