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Editor’s note: now or never for EU’s nature law

Eleven EU environment ministers have signed a letter demanding their counterparts in other member states give the green light to the proposed Nature Restoration Law  © Roni Rekomaa/Bloomberg
Eleven EU environment ministers have signed a letter demanding their counterparts in other member states give the green light to the proposed Nature Restoration Law  © Roni Rekomaa/Bloomberg

The latest edition of our Sustainable Views newsletter

Dear reader,

Eleven EU environment ministers have written to their counterparts in other countries calling on them to back the EU Nature Restoration Law. Hungary blocked the bill’s approval earlier this year by deciding at the last minute to join naysayers like Sweden, the Netherlands and Italy. In July, Hungary will take over the six-month rotating EU presidency and many fear the legislation will never become reality if not signed off by the end of June.

Ireland, Germany, France, Spain, the Czech Republic, Denmark, Estonia, Cyprus, Luxembourg, Lithuania and Slovenia signed the letter demanding countries give the green light to the proposed law. 

The bill has received backing from businesses and investors. A September 2023 briefing by the Corporate Leaders Groups, whose members include Amazon, Google and Ikea, said the law would create “an enabling policy framework for nature restoration in which businesses can engage” and lead to “opportunities for access to funding and investment”. 

According to a report published this morning by the WWF, EU member states, in particular through the Common Agricultural Policy, are spending European subsidies worth €34bn-€48bn every year on activities that harm nature. The report also singles out fisheries and water and transport infrastructure as other areas where EU subsidies are financing projects that damage or destroy biodiversity.

And while direct investments in nature protection are important, the report likewise insists on the need to “mitigate the negative effects of infrastructure development, land use, resource consumption, business practices in natural resource-dependent sectors and other harmful activities” to ensure efforts and resources aimed at protecting and enhancing natural ecosystems are not undermined.

One of the report’s recommendations is an updated “do no significant harm” taxonomy that would be applied across the entire EU budget and associated policies, and the exclusion of “always environmentally harmful” sectors, companies or economic activities from receiving any EU funds or incentives. It cites new airport infrastructure or new hydropower plants as examples of such sectors. 

Yesterday, the European Commission published guidance to speed up the permitting process for renewable energy projects. It is aimed at helping member states to identify so-called renewable acceleration areas, regions where the deployment of renewables is not expected to have significant negative impacts on the surrounding environment.

Rebecca Humphries, head of climate policy for Europe at non-profit The Nature Conservancy, says the prioritisation of environmental risk will “ensure both the EU’s climate and biodiversity goals are met”. She also welcomes the inclusion of non-price criteria, including quality, contribution to resilience and environmental sustainability” as a “positive step to accelerate investment in the expansion of nature-positive renewable energy”.

In other news, Marie has delved into the data around sukuk and discovered how issuance volumes of the Islamic finance instruments remain comparatively small, but are fast ramping up. Annual sustainable sukuk issuance has increased by more than 3,000 per cent since the first instrument was printed seven years ago, shows London Stock Exchange Group data. In 2017, $0.4bn of green, social, sustainability or sustainability-linked sukuk were issued, compared with $13.4bn last year. 

And finally, our colleagues over at The Banker report that while JPMorgan and other big banks continue to dominate fossil fuel financing, an apparent new trend is the “stepping in” of smaller lenders into deals other banks may not be willing to finance.

“There’s a little bit of that dynamic of some fossil fuel companies having a harder time getting capital from banks, which is a good thing. So, they’re seeking that elsewhere and some of that is from medium-sized banks, as well as non-bank financial institutions,” says Rainforest Action Network research and policy manager April Merleaux. 

Until tomorrow,

Philippa

Philippa Nuttall is the editor of Sustainable Views 

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