ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
Featured Posts
    • Latest News
    UK to review Macquarie’s £4.2bn deal for National Grid’s gas business
    • August 7, 2022
    • Latest News
    The challenges for Latin America’s new left
    • August 7, 2022
    • Latest News
    Disengaged, indifferent, deluded? Why young workers have an image problem
    • August 7, 2022
    • Latest News
    Colombia ushers in its most leftwing president
    • August 7, 2022
    • Companies
    Merck defends tax approach against senator’s claims of avoidance
    • August 7, 2022
Featured Categories
Belarussia
View Posts
Companies
View Posts
Energy
View Posts
Environment
View Posts
Food
View Posts
Governance
View Posts
Health
View Posts
Investors
View Posts
Latest News
View Posts
Markets
View Posts
Potash
View Posts
Regulators
View Posts
Russsia
View Posts
Social
View Posts
Supply Chain
View Posts
Sustainable Finance
View Posts
Technology
View Posts
Uncategorized
View Posts
ESG Telegraph ESG Telegraph
7K
9K
4K
1K
ESG Telegraph ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
  • Sustainable Finance

Sustainable Investor Group Urges Lawmakers to Keep Gas Out of EU Taxonomy

  • January 15, 2022
  • Staff
Total
0
Shares
0
0
0

Sustainable investing-focused group the Institutional Investors Group on Climate Change (IIGCC) announced today the publication of an open letter to European Union Member State representatives and parliament members, calling for gas to be excluded from the EU Taxonomy green investment classification system. The IIGCC membership includes over 370 investors, representing more than €50 trillion in AUM.

The EU Taxonomy is part of the EU Action Plan on Sustainable Finance, established by the EU Technical Expert Group on Sustainable Finance (EU TEG). The taxonomy is a classification system enabling the categorization of economic activities that play key roles in contributing to at least one of six defined environmental objectives, starting with climate change mitigation and climate change adaptation, and no significant harm done to the other objectives.

The regulation went into effect at the beginning of this year, following approval in December, while the assessment of gas and nuclear energy as eligible areas for green investment remained ongoing. While gas and nuclear energy are often viewed as transition energy sources that will be required to facilitate the shift from fossil-based power to a greener energy system, several sustainability-focused groups have warned that their inclusion in the taxonomy could undermine the classification system’s purpose and open it up to concerns of greenwashing.

Earlier this month, the European Commission announced that consultations have begun on the inclusion of gas and nuclear energy as green investment areas under the EU Taxonomy classification system. While the commission said that these energy sources would only be classified in the Taxonomy under tight conditions, such as requiring gas to come from renewable sources or have low emissions by 2035, lawmakers from some member states, such as Germany and Austria, objected strongly to their inclusion.

In the open letter, the IIGCC lays out its own opposition to the inclusion of gas in the Taxonomy, highlighting the challenges it will create for investors as they aim to channel capital towards environmentally sustainable activities and pursue net zero investment goals. The investors wrote:

“The fundamental purpose of the Taxonomy is to enable capital to be channelled towards economic activities that are fully compatible with the EU’s commitment to climate neutrality by 2050 and reducing emissions by 55% by 2030. Moreover, the IEA net zero by 2050 pathway is clear that demand for natural gas will need to shrink by 8% below 2019 levels by 2030 and by 55% by 2050. Existing gas-fired power plants will also have to be phased out by 2035. Put simply, there is no remaining carbon budget for new investments in natural gas.”

Stephanie Pfeifer, CEO, IIGCC, said:

“As the cornerstone of the EU’s sustainable finance agenda, the inclusion of gas would undermine the credibility of the taxonomy as well as the EU’s own commitment to climate neutrality by 2050. While there is a place for gas as a short-term bridge as part of a period of transition, it cannot honestly be classified as green.”

The letter pointed out that while natural gas may have a role to play as a bridge to support the transition to net zero, it does not meet the prescribed requirements to be classified as a transitional activity, and its inclusion in the taxonomy would be misleading. According to the letter, “any inclusion of gas within the Taxonomy would also undermine the EU’s ambitions to set the international benchmark for credible, science-based standards for classifying sustainable economic activities.”

Pfeifer added:

“For institutional investors, the inclusion of gas will limit their ability to align their portfolios and investment with net zero. At a time when we need clarity, the inclusion of gas creates an unhelpful precedent and muddies the waters for investors looking to do the right thing.”

“The inclusion of gas also risks channelling material levels of capital towards initiatives that undermine a sustainable, net zero future. We urge policymakers to vote accordingly.”    

Total
0
Shares
Share 0
Tweet 0
Pin it 0
You May Also Like
Read More
  • Sustainable Finance

Standard Chartered Hires Google Sustainability Leader Kerry Constabile to Head Net Zero & Sustainability Strategy Teams

  • Staff
  • August 5, 2022
Read More
  • Sustainable Finance

Singapore Raises S$2.4 Billion in Inaugural Green Bond Offering

  • Staff
  • August 5, 2022
Read More
  • Sustainable Finance

Citi Launches Sustainable Deposit Solution in Asia Pacific

  • Staff
  • August 4, 2022
Read More
  • Sustainable Finance

Carlyle Launches Decarbonization-Linked Finance Program for Private Credit Market

  • Staff
  • August 2, 2022
Read More
  • Sustainable Finance

Singapore to Launch Inaugural Green Bond this Week

  • Staff
  • August 2, 2022
Read More
  • Sustainable Finance

GM Issues its First Green Bond to Power Clean Transportation Investments

  • Staff
  • August 1, 2022
Read More
  • Sustainable Finance

Sustainable Bond Volumes Outperform Broader Market to Reach Record Share: Moody’s

  • Staff
  • July 29, 2022
Read More
  • Sustainable Finance

OPG Issues $300M “Nuclear Green Bond”

  • Staff
  • July 19, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Featured Posts
  • 1
    UK to review Macquarie’s £4.2bn deal for National Grid’s gas business
    • August 7, 2022
  • 2
    The challenges for Latin America’s new left
    • August 7, 2022
  • 3
    Disengaged, indifferent, deluded? Why young workers have an image problem
    • August 7, 2022
  • 4
    Colombia ushers in its most leftwing president
    • August 7, 2022
  • 5
    Merck defends tax approach against senator’s claims of avoidance
    • August 7, 2022
Recent Posts
  • The west’s phantom energy sanctions fuel Russia’s war machine
    • August 7, 2022
  • US banks tout fossil fuel credentials after Republican ESG backlash
    • August 7, 2022
  • Bolsonaro bets improving Brazilian economy will be election boon
    • August 7, 2022

Sign Up for Our Newsletters

Subscribe now to our newsletter

ESG Telegraph
  • Home
  • Privacy Policy
  • Guest Post
  • Contact

Input your search keywords and press Enter.