Crucial vote on the Sustainable Finance Taxonomy
Under the initiative of FEBEA (European Federation of Ethical and Alternative Banks), Social Economy Europe (SEE), the European Microfinance Network (EMN), and the Microfinance Centre (MFC) have co-signed an open letter ahead of the crucial EP vote this week on the sustainable finance taxonomy.
In recent days, votes of crucial importance have been held and are being held in the European Parliament. We would like to draw your attention to the issue of the so-called “Complementary Delegated Act” to the Sustainable Finance Taxonomy, on which the plenary will vote in the next days.
Over the next ten years, the EU must invest an additional 350 billion euros each year to reach the 2030 climate goals. Taxonomy is a key tool for guiding private markets towards this goal but will only be successful if it is based on the inputs of the scientific community and will follow the advice of experts.
However, the EU Commission has proposed to classify gas and nuclear energy as “sustainable” investments in the aforementioned “Complementary Delegated Act” to the taxonomy. This could divert billions of euros from renewables and other green technologies towards polluting fossil fuels and costly nuclear power, making it more difficult to achieve EU environmental goals.
We are concerned about the impact that this decision will have on the environmental credibility of the European Union itself. Furthermore, the war in Ukraine and the energy prices crisis are creating a radically new context. Gas has become a source of energy insecurity and geopolitical risk in Europe. Moreover, the Taxonomy does not prevent any investment, nor does it oblige anyone to invest in anything: it only clarifies which investments are sustainable from an environmental point of view. MEPs can therefore reject the inclusion of gas and nuclear in the taxonomy, and this will not prevent anyone from supporting gas and nuclear with public and private funding. Eliminating gas and nuclear power from the classification of environmentally sustainable investments, however, will prevent private investors and citizens from being (and feeling) deceived.
It is not a question of prohibiting gas and nuclear power per se, but of defining what is sustainable and what is not. Excluding gas and nuclear power is essential in order not to make the word “sustainability” meaningless and not to destroy the entire work on Sustainable Finance. Even beyond the importance of excluding gas and nuclear in itself, the credibility of all the work done in recent years to define what is sustainable finance and what is not is at stake, as well as the overall credibility of the European institutions that have promoted this path.
Gas and nuclear power are not green and classifying them as such violates the letter and spirit of the Taxonomy Regulation, which requires its criteria to be based on “clear scientific evidence”.
Europe should work to confirm and relaunch strong leadership in the fight against climate change. Including gas and nuclear power among sustainable activities would undermine the possibility of carving out this role.
For these reasons, we ask the Members of the European Parliament to vote in favor of the motion, already signed by many MEPs from different sides, and voted in favor by the ENVI and ECON Commissions gathered jointly on 14 June last, to ask for the exclusion of gas and nuclear power. A decisive vote for sustainable finance, for the citizens of the European Union and critical to address the climate crisis we are all experiencing.
– Daniel Sorrosal, Secretary General of FEBEA
– Juan Antonio Pedreño, President of Social Economy Europe
– Caroline Tsilikounas, General Manager of European Microfinance Network
– Katarzyna Pawlak, Executive Director of Microfinance Center