EU's €750B recovery fund to funnel investments towards climate action
Image credit: Robert Anasch/Unsplash
In a speech today before European Parliament, European Commission President
Ursula von der Leyen unveiled “Next Generation
EU” — a
seven-year, €1trn budget proposal and a €750bn recovery plan that rely heavily
on sustainable and digital transitions as a path not only toward recovery from
the devastating impacts of the COVID crisis, but also a resilient future for
Europe.
“The recovery plan turns the immense challenge we face into an opportunity, not
only by supporting the recovery but also by investing in our future: the
European Green Deal and digitalisation will boost jobs and growth, the
resilience of our societies and the health of our environment,” von der Leyen
said. “This is Europe’s moment. Our willingness to act must live up to the
challenges we are all facing. With Next Generation EU we are providing an
ambitious answer.”
The spending will be guided by a sustainable finance
taxonomy,
to aim to channel private investments into technologies and solutions that
contribute to at least one of six pre-defined environmental objectives:
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Climate change mitigation
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Climate change adaptation
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Sustainable use and protection of water and marine resources
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Transition to a circular
economy
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Pollution prevention control
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Protection and restoration of biodiversity and
ecosystems
The taxonomy sets performance thresholds for economic activities, including that
they make a substantive contribution to one of the six environmental objectives,
and “do no significant harm” (DNSH) — which could in theory prevent investments
into
coal
and other highly polluting fossil-based power sources. Approved investments must
also meet minimum safeguards (e.g., OECD Guidelines on Multinational
Enterprises and the UN Guiding Principles on Business and Human Rights).
Read more here.
Canadian companies must disclose climate impacts to qualify for COVID-stimulus funds
Image credit: Ethan McArthur/Unsplash
Meanwhile, earlier this month, Canadian Prime Minister Justin Trudeau announced
that Canadian companies seeking COVID-19 relief funding will be required to
disclose their climate impacts and commit to continued attention to
environmental sustainability.
To help protect the millions of middle-class jobs tied to large and medium-sized
businesses, the Government of Canada has instituted the Large Employer
Emergency Financing Facility (LEEFF) to help Canadian businesses weather
the current economic downturn, and avoid bankruptcies of otherwise viable firms
where possible. One condition of the relief package is that recipient companies
with annual revenues of $300 million or more commit to publishing annual,
climate-related disclosure reports consistent with the Financial Stability
Board’s Task Force on Climate-related Financial Disclosures — including how
their future operations will support environmental sustainability and national
climate goals.
As Canadian Finance Minister Bill Morneau told CBC
News,
“Among the conditions are making sure that there [are] no share buybacks or
dividends or excessive executive pay, but also that companies have financial
disclosures on their climate situation and that they’re part of our long-term
sustainability goals.”
All of which sounds great – but, as E&E
News points
out, the program does allow for some of the most-polluting industries, such as
airlines and oil companies, to apply for loans of $60-90 million, as long as
they abide by the rules.
As in many countries, energy politics remain a big part of Canada's national
debate, and the Trudeau administration has been criticized by NGOs for bowing to
industry lobbyists, even as it takes a strong public stance on the need for
climate
action.
At a news conference in Ottawa on May 11, Trudeau
said,
"People will be asking about what their risk-mitigation strategies for pandemics
are as they invest in companies going forward," Trudeau said. "But we also know
that climate change represents a significant risk to companies' bottom line, as
well."
Read more about Canada’s LEEFF
here ...
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Sustainable Brands Staff
Published May 27, 2020 2pm EDT / 11am PDT / 7pm BST / 8pm CEST