The EU has committed to becoming a net zero greenhouse gas economy by 2050
‘EU’s sustainable finance rules undermine climate goal,’ claim experts
The European Commission’s planned new rules on sustainable finance could undermine the bloc’s climate change goals, according to an open letter signed by Professor Chendi Zhang, Director of the Business School’s new Exeter Sustainable Finance Centre.
Professor Zhang is among 123 scientists urging the European Commission to address a “critical oversight” in the proposals, part of the so-called European Green Deal, which they argue are incompatible with its target of net zero greenhouse gas emissions by 2050.
Last month the EU published draft criteria for its sustainable finance taxonomy – a system of classifying investments that can be marketed as sustainable.
The scientists are concerned over plans to class gas-fuelled power plants as sustainable if they meet an emissions limit of 100 grams of CO2 equivalent per kilowatt hour.
This had originally been recommended as a starting threshold that must be reduced every five years, eventually to zero, but the proposal omits the requirement for the limit to decrease over time.
Professor Zhang, a Professor in Finance and Director of Research at the University of Exeter Business School and pioneer in research into socially responsible investing, is among the signatories of the letter, along with leading experts in the fields of climate science and sustainable finance.
“The current situation results in a disconnect between the definitions that will guide the implementation of the European Green Deal and the EU’s ultimate climate objective of becoming a net zero greenhouse gas economy by 2050,” the scientists said.
“This disconnect is particularly troubling at a time when global climate leadership and environmental integrity is ever more urgent.
"We assume this omission can only be an unfortunate administrative oversight in these extraordinary times that, however, needs urgent correction."
The European Commission is taking feedback on its plans until 18 December, before writing its final rules.
Date: 16 December 2020