Ladies
and gentlemen: more and more countries are committed to a healthier,
resilient, climate-neutral world. I am proud to say that Europe is the
frontrunner in the ‘race to zero'.
Meeting these ambitious targets will not be cheap.
It will require massive investment.
Over this decade, we estimate that Europe will need around €350
billion euros of annual extra investment to meet its 2030 emissions
target in energy systems alone.
This is in addition to around €130 billion it will need for other environmental goals.
We have known for a long time that public money will not be enough. And we have to rely on the private sector.
This is why sustainable finance is so important: to generate investment at the scale needed.
Over the years, we have already achieved a lot in sustainable finance.
We have been successful in creating long-term signals to guide
financial and capital flows to green investment and to manage the risks
that climate change and environmental degradation pose to the financial
sector.
Now we need to go further still.
Sustainability is at the heart of our recovery plan: the green transition will be a major source of future economic growth.
This is why we want to focus on recognising transition efforts, and on how to finance them.
Today, we are building on the progress made so far.
Firstly, we are proposing an EU green bond standard, fully aligned with our taxonomy classification system.
This will help to fight greenwashing, recognise bonds that truly
represent a sustainable investment and ensure the integrity of this
market.
All issuers, in Europe and outside, will be able to use this voluntarily to help attract sustainable investments.
Green bonds have become increasingly popular worldwide. Demand now
outstrips supply and many companies and governments want to issue
climate and environment-friendly debt.
These bonds are used to raise financing in sectors such as energy
production and distribution, resource-efficient housing, or low-carbon
transport infrastructure.
Then, we are presenting an updated sustainable finance strategy to
address the challenges arising from the extra investment needed to meet
our more ambitious targets, as well as the new global context.
Mairead will go into the strategy in more detail.
Let me just highlight some points.
The strategy examines how to create sustainable funding opportunities for smaller businesses.
This is where the EU's sustainable finance agenda and Capital Markets
Union can strengthen each other. Together, they can provide SMEs with
more financing opportunities, and encourage greater retail investor
participation in capital markets.
So, we need a Green Capital Markets Union.
Individuals and households can also play an important role in transforming the economy by accessing sustainable finance.
To encourage green retail lending, the Commission will ask the
European Banking Authority for its views on best ways to press ahead
with green retail loans and green mortgages. We will also examine how to
promote more use of energy-efficient mortgages in the upcoming review
of EU mortgage credit rules.
The taxonomy system will play a major role too.
We will continue to develop it, to make sure that it works for
companies and sectors that are already green and also for those wanting
to transition to green.
Today, the Commission adopted a Delegated Act that requires large
financial and non-financial companies to provide information to
investors about the environmental performance of their assets and
economic activities aligned with the EU taxonomy system.
This will again help to prevent greenwashing.
Lastly, a few words on the international dimension.
Today's strategy goes beyond Europe.
The global community still needs to push forward with sustainable finance to tackle what is a global challenge.
The pandemic has also shown the importance of the world working
together to address the climate crisis and other challenges such as
biodiversity loss, and to invest smartly.
Global cooperation on sustainable finance is improving and the international context has changed – especially with the pandemic.
While Europe opened the way on sustainable finance, many others are now following.
On this global issue, it is important that we keep working with all
like-minded partners to deepen our cooperation. The International
Platform on Sustainable Finance is a good example.
We set this up for our partners to work together with us on a green
global financial system, and on areas such as taxonomy and company
disclosures on sustainable activities.