The transition to a net-zero emission economy will require significant private and public investment. However, the European Union is not doing enough to channel money into sustainable activities. That is the conclusion of this special report by the European Court of Auditors (ECA).
According to the report, the European Commission needs to apply consistent criteria to determine the sustainability of EU budget investments and better target efforts to generate sustainable investment opportunities. With regards to specific regulatory measures, the report found that planned actions rightly focused on how to improve transparency – both on which investments are sustainable and on how the financial sector and companies report on sustainability.
Many actions, however, have suffered delays and require further steps to become applicable. In particular, it has taken longer than planned to complete the common classification system for sustainable activities (the EU Taxonomy) that forms the basis for labelling financial products and standardizing sustainability disclosures for companies. These measures will not be fully effective unless they are accompanied by sufficient measures to reflect the environmental and social costs of unsustainable activities.