The decision to include gas and nuclear in the EU green taxonomy undermines the credibility of the EU to combat the climate urgency, according to the Global Alliance for Banking on Values.
Amsterdam, Netherlands, 14 July 2022. The European Parliament has failed to reject the European Commission’s plan to label investments in nuclear and gas projects as environmentally sustainable. The Global Alliance for Banking on Values (GABV) deeply regrets this decision, which is a blow to the credibility of the European Commission’s commitment to combat the climate crisis.
Martin Rohner, Executive Director of the GABV: “The European Union members of the Global Alliance for Banking on Values will continue excluding nuclear power and fossil fuels irrespective of the EU decision. They focus on the development of renewable energies, which today is the only option for an environmental transformation of our economy.”
Why the GABV thinks that the European Parliament is wrong:
- From an environmental perspective, gas and nuclear power are highly problematic energy sources, as the scientific and empirical evidence shows.
- Gas and nuclear power are well funded. The EU taxonomy, however, was designed to offer a classification system to direct investments towards sustainable projects and activities, not to raise finance for well-established industries. Including gas and nuclear power in the EU taxonomy will affect its integrity and credibility among investors and, therefore, their ability to deliver capital and finance to genuinely green industries that need funding.
- The decision is not consistent with the environmental objectives defined and developed in the stakeholder process leading up to the taxonomy. They include: protecting the climate, avoiding pollution, and protecting ecosystems and biodiversity. Gas and nuclear power are contrary to these goals. Several EU countries and NGOs have announced legal challenges to the decision because it contradicts the vital “do no significant harm” requirement.
- The EU taxonomy is being politicized as a tool to defend the national interests of a few, instead of creating a shared framework to address the climate urgency which affects the many. It is being used to greenwash gas and nuclear power.
- The decision undermines the credibility of the EU when it comes to its stated objectives to protect the environment.
This decision puts at risk the credibility and achievement of the extensive work done by EU institutions in recent years to regulate the ESG finance sector. Although the market for sustainable financial products is rapidly growing, there is no common understanding and minimum benchmark for what ‘sustainability’ actually means. Trustworthy minimum standards for sustainable investments are needed to counteract greenwashing in the financial markets. The EU taxonomy could have provided this.
The green taxonomy controversy should not derail the work in progress on social impact in the EU Taxonomy. The GABV calls upon the EU Commission to ensure the development of an ambitious and unambiguous social taxonomy and take into account the views of the Platform on Sustainable Finance (PSF). In its final report, the PSF emphasized that it is crucial to define clearly what constitutes a social investment.
Banca Etica (Italy, Spain): Anna Fasano, president of Banca Etica, has described the EU Parliament vote as “a major greenwashing operation, making a mockery of investors who believe in the ecological transition. We will continue to distinguish ourselves from those who sell highly harmful or polluting financial products as green, now with EU validation. We hope that, at least, the new legislation will strictly apply to the extent that it requires financial companies to inform customers if the products sold as sustainable also include investments in gas and nuclear power.”
GLS Bank (Germany): GLS CEO, Thomas Jorberg, sent a letter to parliamentarians to ask them to object to the European Commission’s plans to include gas and nuclear: “The new set of rules for sustainable investments threatens to become exactly what it is intended to prevent: greenwashing. Because nuclear power and gas are just as unsustainable as pesticides are ‘organic’. By including nuclear energy and gas, the taxonomy misses the point of its original idea. The further discussion about evaluating investments in weapons as social leads to the taxonomy ad absurdum. All these are associated with significant negative environmental and social impacts.”
Triodos Bank (The Netherlands, Belgium, UK, Spain and Germany): Triodos Bank, which started to invest in renewables in 1986 after the Chernobyl nuclear disaster, has expressed its disappointment with the outcome of the EU Parliament vote. “The taxonomy has evolved from a widely supported list to a controversial tool that actually encourages greenwashing. Natural gas should not be included, because it does not comply with the EU climate law and does not substantially contribute to reducing CO2 emissions. Natural gas can produce almost three times as much carbon as biomass gas (270g resp. 100 g CO2/kWh) and can still be called green. Nuclear power does not comply with the ‘do no significant harm’ principle, which states that any activity must not harm other environmental goals. The lack of a guaranteed and definitive solution for the disposal of nuclear waste goes against that principle.”
Other GABV member banks in the European Union, such as Umweltbank (Germany) and Merkur (Denmark), have stood against the classification of nuclear power and gas as sustainable investments. GABV members guarantee sustainable investors and savers that their money will not finance gas and nuclear power.
About the GABV
The Global Alliance for Banking on Values (GABV) is a network of independent banks using finance to deliver sustainable economic, social and environmental development. The GABV has 68 members and operates in 40 countries across Asia, Africa, Asia Pacific, Latin America, North America and Europe. Collectively, they serve more than 60 million customers and hold over USD 210 billion of combined assets under management. Learn more at gabv.org
For more information, examples and interviews, please contact:
Sonia Felipe Larios
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