A group of global investors has called for a tightening of EU sustainable finance regulations to ensure €700 billion (US$760 billion) a year of investment flows into clean technologies. In a new report, the Institutional Investment Group on Climate Change (IIGCC) called for a tightening of key rules including the EU Taxonomy for sustainable activities, the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Sustainable Finance Disclosure Regulations (SFDR). The report said European policymakers should “facilitate access to the robust, comparable data investors need to assess the credibility of investees’ transition efforts and inform investment decisions and engagement activities”; mitigate greenwashing risk by “establishing clear definitions and parameters for climate solutions and transition finance”; and encourage the “reorientation of capital” to support decarbonisation. IIGCC CEO Stephanie Pfeifer said the pace of legislative change in the EU over the past five years had been “unprecedented”, but that more will be needed in the next five years, after the election of a new European Parliament and Commission this year. “The incoming EU mandate will span the period running up to the critical milestone of 2030, and the commission’s focus must now turn from ambition to implementation,” Pfeifer said – pointing to the Commission’s estimate of the yearly €700 billion of investment needed to meet the 55% emissions reduction target by 2030. “This is an opportune moment to build on the significant progress made and to ensure that the EU’s suite of regulations provides a basis for channelling capital in line with net zero,” Pfeifer added.
