The European Central Bank (ECB) published a document saying the EU must increase investment by an extra €558bn a year, otherwise the bloc would fail to meet its climate targets by 2030.
The complexity of the rules currently limits the positive impact of these initiatives on green investments.
The document described the rules as costly and “demanding,” referring to the EU’s green investment taxonomy and its “high threshold” for investment. In response to industry concerns over competitiveness, European Commission President Ursula von der Leyen pledged to simplify the framework during her second term.
However, the plan is to target not only the EU’s green taxonomy rules but also the Corporate Sustainability Reporting Directive (CSRD), both of which are mentioned in the ECB study.
Stanislas Jourdan, policy expert at Sustainable Finance Lab, stated that “right now, green lending barely gets rewarded.” The solution may be to introduce a green interest rate that is lower “say 100 to 200 bps below the market rate.”
