Wednesday 30 May 2018
The EU has launched a series of proposals to help enable the financial sector to lead the way to a greener and cleaner economy.
In a new report, it says leveraging funding to reduce the region's environmental footprint while enhancing the competitiveness of its economy is vital to fighting climate change and successfully implementing the Paris Agreement.
Last year, the amount of climate-related losses covered by insurance reached an all-time high of €110 billion (£96bn).
The EU's first proposal says it will set out defined criteria for determining whether an economic activity is environmentally-sustainable, enabling investors to take more informed decisions.
It also plans to introduce regulation dictating how institutional investors, such as asset managers, insurance companies, pension funds and investment advisors should integrate environmental, social and governance factors in their investment decision-making processes.
The report adds standardised low carbon benchmarks should be introduced so different organisations can work towards widely known goals and has launched a consultation to assess how best to include environmental considerations into the advice investment firms and insurance distributors offer to individual clients.
Jyrki Katainen, Vice-President responsible for Jobs, Growth, Investment and Competitiveness, said: "To achieve the EU's 2030 climate targets, we need around €180 billion (£157bn) a year of additional investments in energy efficiency and renewable energy. Mobilising private capital to fund sustainable investment is essential.
"Today's proposals will increase transparency of sustainable finance and the investment opportunities it offers, so that investors have reliable information available to enable the transition to a low carbon, resource-efficient and circular economy."