Daily ESG Briefing: EU accused of bowing to pressure to include fossil-based gas in taxonomy

The latest developments in sustainable finance

The EU is considering including fossil gas-fired power generation in its new taxonomy, according to environmental think-tank E3G. Delegated Acts covering the first phase of the taxonomy – definitions of business activities that support Europe’s climate objectives – have been delayed following what E3G describes as “opposition from 10 Central and Eastern European Member States” over the exclusion of unabated power generation from fossil gas. “It appears that the Commission is now considering including fossil gas-fired power generation in the taxonomy in order to secure political support, using the argument that it can maintain the reliability of electricity supply and contribute to electricity grid stability,” E3G said. Tsvetelina Kuzmanova, a Policy Advisor for Sustainable Finance at the think tank added: “Allowing polluting activities to be classified as green as a result of political and industry pressure would be a serious mis-step for the Commission … Failing to create a best-in-class, scientific tool would set a dangerous precedent for other jurisdictions to follow and could justify investments in harmful activities.”  

UBS saw its impact investing and sustainability-focused investments rise by 154% last year, to $141bn, according to its latest Sustainability Report. The report also said UBS had reduced its exposure to high-carbon related assets to 1.9% of its banking balance sheet in 2020 and donations to the UBS Optimus Foundation rose 74% to $168m in 2020 in reaction to the coronavirus pandemic. 

Moody’s has launched a set of new climate risk measurement tools using data from Four Twenty Seven and Vigeo Eiris. Moody’s Climate Solutions includes forward-looking, physical and transition climate risks assessments and climate risk scenarios. 

BlackRock has said 17% of the $2.4trn it manages are covered under the EU’s Sustainable Finance Disclosure Regulation (SFDR), which came into force yesterday. However, 70% of funds launched or repositioned by BlackRock in Europe will meet SFDR requirements this year, according to reports this week

The World Bank is expected to include ‘blue’ natural capital for the first time in its country wealth tracker this June. The Changing Wealth of Nations report uses indicators beyond traditional GDP to measure the wealth of countries, including human capital and produced capital. This year, RI understands it will include expanded coverage of natural capital, including natural capital like marine fisheries and mangroves.