Stopping GreenWashing

The EU wants to revolutionise the world of green finance. Brussels officials, MEPs and member states are currently trying to thrash out plans for a gold standard in green investment they hope will unleash tens of millions of euros of private money to fund the transition to a more sustainable world.   The project has a classically boring Brussels name — the “taxonomy” for sustainable activities — but the implications are potentially transformative. The EU wants to become the first supranational regulator to write rules that banks and funds will have to comply with when they claim to launch “green” products or investments.  As it stands, there is no global benchmark to judge just how green a financial product is. Funds and banks can sell and label sustainable finance products without an independent arbiter checking if reality meets the hype. The point of the EU’s work is to stamp out this so-called “greenwashing”…

Perhaps the most sensitive issue of all is how to handle nuclear energy. France — which has big nuclear business interests — doesn’t want the taxonomy to stigmatise nuclear as a “brown” technology. Other member states, led by Germany, want it excluded from being green, as do the MEPs. 

Excerpts from  Mehreen Khan, The Green Gold Standard, FT, Nov. 11, 2019

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