Increasing interest in environmentally friendly investments

The reason behind the new roadmap is that investors are showing increasing interest in environmentally friendly investments, while the EU is also working hard to achieve its climate goals, and a growing market for sustainable investments is the perfect arena for harmful “greenwashing”. Greenwashing could result in derailing climate efforts and weakens the incentive for companies to make serious cuts to their greenhouse gas emissions through CCS, for example. As a result of this, ESMA states that the EU will improve its own understanding of current developments and introduce the necessary market oversight in the areas of greatest significance to investors.

Serious about the climate

This shows the EU’s seriousness about its 2050 climate goals as well as the importance of its Strategy on Sustainable Finance, including the EU taxonomy, as a tool for achieving them. There is also increasing awareness in the USA around this issue, especially since President Biden announced more ambitious climate goals last year. To this end, the Chair of the U.S. Securities and Exchange Commission (SEC) announced in February that tougher regulations are on the way.

A report on the scope of greenwashing in large international organisations, ‘Corporate Climate Responsibility Monitor 2022’, was published by two companies based in Germany and Belgium. The report features a review of 25 organisations that have made high-profile statements about their climate goals of reaching “net zero” emissions. The total emissions of the companies assessed were 2.7 Gt CO2, including scopes 1, 2 and 3. The energy companies Enel and E.ON were included.  The companies were assessed according to criteria such as actual emissions recorded and published, how concrete and binding their climate goals are, whether emissions have actually been reduced, and other climate-related measures. The report concludes that only half of the companies explicitly outline what “net zero” means, and that the emission-reducing measures of half of the companies only involve a 40% reduction – not 100% as “net zero” would suggest. None of the 25 companies in the report achieved a “high integrity” grade and only Maersk achieved the second highest grade of “reasonable integrity”.