European policymakers should use a two-tier approach to define sustainable investments in order to smooth the bloc’s transition to a low carbon economy, a group of industry experts has said. The first category proposed by the group on Monday (9 March) would meet strict ‘green’ criteria, with the second including investments that can prove they “do no significant harm”.
The European Commission will use the Technical Expert Group’s (TEG) recommendations to develop rules defining what qualifies as a green investment.
This ‘taxonomy’ is a key plank of the Commission’s “Green Deal” plan to reduce the bloc’s net greenhouse gas emissions to zero by 2050, through policy measures touching sectors from agriculture, to trade, taxation, energy and industry. EU financial services chief Valdis Dombrovskis welcomed the TEG’s input, as part of efforts to “spur the take-up of sustainable finance in Europe”.