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EU has failed to create gold standard for green finance, Spain says

EU has failed to create gold standard for green finance, Spain says
EU has failed to create gold standard for green finance, Spain says   -   Copyright  Thomson Reuters 2022
By Reuters

By Isla Binnie and Kate Abnett

MADRID/BRUSSELS – European countries and companies could end up defining their own standards on green investments if Brussels fails to impose the “gold standard” and classifies spending on gas and nuclear energy as sustainable, a Spanish minister said on Wednesday.

The European Union has split opinion among member states with its plan to include gas and nuclear plants – provided they meet certain criteria – in its sustainable finance taxonomy, a rulebook of investments that limits which can be labelled as green.

“I guess that we will have a silver standard,” Spanish Energy and Environment Minister Teresa Ribera told an online conference organised by German media Der Tagesspiegel, Die Zeit, Handelsblatt and Wirtschaftswoche.

“But there will be many member states and many companies that could try to say that they do not include these technologies in their own portfolio. So I think that it is almost unavoidable that we will have different standards,” she said, adding she would have preferred a “green gold standard”.

The move has also split investors, with some planning to exclude the fuels from their “sustainable” funds, despite the EU labelling them as such.

Spain says gas and nuclear technologies should have a role in the transition to green energy, but this should be dealt with separately from the investment framework – which was designed to give a green investment label to only activities that are aligned with the rapid emissions cuts needed to avert disastrous climate change.

While a handful of EU states have publicly opposed the plan, at least 20 would need to veto it – a threshold seen as unlikely. Austria and Luxembourg have threatened legal action over the plan to label nuclear investments as green, citing concerns about waste disposal.

A majority in the European Parliament could also block it, and Green lawmakers say they will campaign to reach the roughly 350 lawmakers needed for a veto.