22 Jul EU to consider labels for green finance products
In a push to foster sustainable markets and instill trust in investors, the European Commission has discussed plans to introduce labels for clearer classification of green financial products.
In order to achieve the ambitious climate goals set at the Paris Agreement, the European Commission predicts that over the next 20 years an extra 180 billion euros (USD $207 billion) in annual investment will be needed.
The decision to improve EU labeling of green financial products is part of a plan to increase public and private spending on clean energy- and should accelerate the transition to a low carbon economy. The move is also expected to help tackle the issue of green washing, which is when organizations make misleading claims about their actions thus appearing more environmentally friendly than they actually are.
According to Valdis Dombrovskis, the vice president of the EU Commission, over the course of the year, green bond classification is predicted to double its global value to 131 billion euros (USD $151). Discussions on how to introduce universally agreed labels and clearer classifications for green products will begin in 2018, and should significantly boost the sustainable finance market.
Full speech available here.