Miss the EU sustainable finance debate and miss the funding: what’s really at stake for Europe’s industry?
This session raised how sustainable finance is a major, growing and global agenda with potential to be a gamechanger for the way markets and industries shape their future investments. To maintain European competitiveness while contributing to the sustainable transformation, the chemical industry requires significant investment, meaning access to finance is critical. Sustainable finance plays an important role in redirecting capital flows to sustainable economic activities; however, it requires real integration and implementation within various policy agendas. Key points:
- Defining sustainability and collecting relevant data are two challenges. Tools such as the EU Taxonomy are being developed while others, including non-financial reporting obligations are already in place. Speakers highlighted the need for direct dialogue between financial and industrial sectors;
- In 2019, the European Investment Bank (EIB) announced it would transition towards becoming the EU’s Climate Bank; increasing the share of climate-related and/or sustainable projects compliant with the Taxonomy from 25% to 50% in the EIB’s lending portfolio. From January 2021, all projects supported by the EIB must be aligned with the Paris Agreement;
- Concerning risk, banks have started to include climate risks in their loan considerations. As the transition will also need high-risk investments, there are several risk-sharing tools, such as guarantees from the Commission for EIB loans.
“While the driving forces have had a lengthy lead-in time, and while impact may not be immediate, sustainable finance has situated itself within dominant EU narratives with potential for global export” Jelena Macura, Head of Sustainable Finance, Cefic