Sustainable Finance has a key role to play in mobilising the necessary capital to deliver on the policy objectives under the European Green Deal as well as the EU’s international commitments on climate and sustainability objectives. It helps ensure that investments support a resilient economy and a sustainable recovery from the impacts of the COVID-19 pandemic.

The EU taxonomy is also a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. The taxonomy sets performance thresholds (referred to as ‘technical screening criteria’) for economic activities which:

• make a substantive contribution to one of six environmental objectives

• do no significant harm (DNSH) to the other five, where relevant
• meet minimum safeguards (e.g., OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights).

The Technical Expert Group on Sustainable Finance has also proposed an EU Green Bond Standard based on the use-of-proceeds approach, which allows any company to issue green bonds, regardless of their main business activity, as long as they finance eligible green projects. This approach also allows any company to use green bonds to finance its transition to an environmentally sustainable business model. For example, a utility company wishing to make its energy production more environmentally sustainable by constructing wind farms, to increase the share of renewable energy in its energy mix, could issue an EU Green Bond to finance this construction.

This information will not only help financial market participants and other relevant actors on the financial markets to easily identify which economic operators carry out environmentally sustainable economic activities, but will also make it easier for those economic operators to raise funding for their environmentally sustainable activities. 

For information on how B2EU Consulting could support your organisation in developing a funding strategy and in unlocking different financing tools for your operation in the green sector, please don’t hesitate to contact us at: info@b2eu-consulting.com.