Meeting the Paris Agreement will require a major shift in financial investments away from fossil fuels towards mitigation and climate resilience. The combination of an increasing volume and demand in sustainable investments on the one hand, and a lack of harmonised criteria to characterise these investments on the other, led ISO to initiate the development of a series of international standards on environmental finance. Addressed primarily at financial institutions and institutional investors, these standards could make a substantial contribution to the implementation of the Paris Agreement and the UN 2030 Agenda for Sustainable Development.
Last June, the European Commission Technical Expert Group (TEG) published the first draft of the Taxonomy Technical Report, a classification of economic activities that could be claimed as environmentally sustainable. Even though in includes ambitious criteria for certain activities, we have serious concerns about the presence of dirty fossil fuels and the lack of fundamental sustainability requirements for other proposed activities.
On 18 June, the European Commission released a number of documents which will shape the future of sustainable finance in the European Union. Two of them are of particular importance for our work, as they will heavily feed into the development of ISO standards.
We call for a truly sustainable EU Taxonomy, which excludes all fossil-generated hydrogen, electricity and heat. This will allow the focus to remain on the many existing safe, efficient and economically viable ways to produce fully decarbonised electricity and heat from renewables.
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