In Brief: EIB raises RePowerEU funding to €45bn; UK government sued again over net zero strategy

The latest news on ESG policy and regulation.

The European Investment Bank has raised to €45bn its funding under the REPowerEU plan, designed to stimulate the bloc’s independence from fossil fuel imports following Russia’s invasion of Ukraine. Sectors expected to benefit from the bank’s support include solar photovoltaic and solar thermal technologies, onshore and offshore wind, battery and storage, heat pumps and geothermal technologies, electrolysers and fuel cells, sustainable biogas, carbon capture and storage, and grid technologies. Companies active in the extraction, processing and recycling of related critical raw materials will also be able to apply for funding.

The European Securities and Markets Authority has published a statement about sustainability disclosures in prospectuses. It details the regulator’s expectations on environmental, social and governance factors in equity and non-equity prospectuses, including disclosures required under “use of proceeds” bonds and “sustainability-linked” bonds. The aim of the guidance is to ensure a consistent approach across national supervisory authorities and to support investors in making informed decisions on sustainability matters.

Members of the European parliament meeting in Strasbourg approved plans, already agreed with the European Council, that set new energy-saving targets for 2030 as part of the European Green Deal. Member states will collectively have to ensure a reduction in energy consumption of at least 11.7 per cent at EU level by 2030, compared with the projections of the 2020 reference scenario.

MEPs also approved rules on increasing charging stations for electric cars and trucks and on cleaner maritime fuels. Member states will need to install recharging stations every 60km for cars, every 120km for trucks and buses, and hydrogen refuelling stations every 200km. MEPs likewise backed ecodesign rules designed to ensure products on the EU market are more sustainable.

MEPs narrowly backed the controversial Nature Restoration Law, with further negotiations set to start next week between the parliament, the council and the European Commission to finalise a deal.

At the Ministerial on Climate Action in Brussels, co-hosted by the EU, China and Canada, president-designate Sultan al-Jaber set out his vision for COP28. His vision includes four key areas of outcomes for the international climate conference to be held in Dubai in December: “fast-tracking the transition, fixing climate finance, focusing on people, lives and livelihoods and underpinning everything with full inclusivity”. Tom Evans, policy adviser at climate thank-tank E3G, said: “Al-Jaber’s vision has the right ingredients, but the proof will be in the pudding.”

The Council of the European Union has adopted a law on the life cycle of batteries and waste batteries. The regulation will look at the whole life cycle of batteries — production, recycling, supply chain and reuse — and aims to reduce the negative environmental and social impacts associated with the products.

The European Commission has announced circularity measures for the automotive sector, which would involve targeting the design, production and end-of-life treatment of vehicles. The commission also proposed rules to increase the sustainability of freight transport by providing, for instance, incentives for low-emission lorries and better guidance on the sector’s greenhouse gas emissions.

The European Financial Reporting Advisory Group has extended ​the period for which candidates can apply to join the group’s banking, capital markets and insurance advisory panels. The deadline has been moved from July 31 to September 15.

Separately, Efrag shared a number of “key messages” with EU finance commissioner Mairead McGuinness in a public meeting last week. Among other things, the body emphasised the need for consistency and co-ordinated timing between the different regulatory rules and for a definition of materiality in sustainable finance reporting.

The International Financial Reporting Standards Foundation will take over the monitoring of companies’ progress on climate-related disclosures from the Task Force on Climate-related Financial Disclosures from 2024. The news follows the publication of the first two sets of International Sustainability Standards Board’s standards.

In a hearing at the High Court in London, non-profit ClientEarth made its case to relaunch procedures against the board of Shell. The claimants argue that the energy company’s board directors have breached their duties under the UK Companies Act by agreeing on a climate strategy that is not aligned with the Paris Agreement. The court has been reluctant to intervene in the commercial strategy of large corporations, but ClientEarth argued it was asking the court to evaluate “the process and journey”, rather than a “business decision”. Lawyers for Shell said there was a mismatch between ClientEarth’s objectives and the duties of its board to act in the best interest of the company. Catherine Gilfedder, a partner at law firm Dentons, who is not involved in the case, told Sustainable Views: “Whatever the outcome … the case is significant as it brings into sharp focus the challenges directors face in balancing competing factors when designing energy transition strategies.” She expects to see similar cases in the UK and elsewhere.

Friends of the Earth, ClientEarth and the Good Law Project are suing the UK government once again over its net zero strategy. The government lost a similar case last year and was forced to publish a revised strategy. The three non-profits claim the revised strategy is still unlawful, with plans for decarbonising the country not credible. The claimants have filed their case with the High Court requesting a judicial review.

Canada has said it will contribute C$450m ($343m) to the Green Climate Fund, a climate mitigation and adaptation funding mechanism under the Paris Agreement. Germany and the US have also pledged further funding.

The US Department of Agriculture has announced it will provide $300m in funding under the Inflation Reduction Act to improve the measurement, monitoring, reporting and verification of greenhouse gas emissions and carbon sequestration in climate-smart agriculture and forestry. The agency has also released and put up for consultation its federal strategy to advance greenhouse gas measurement and monitoring for the agriculture and forest sectors. It aims to gather information on the strategy as a whole, on animal agriculture, on croplands and on data sharing.

New Zealand is consulting on a national biodiversity credit scheme, gathering feedback on the potential design of such market and how it would interact with other sustainable finance policies.