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In Brief: EU council proposes ban on generic green claims; Germany pledges €2bn to Green Climate Fund

The latest round-up of ESG policy and regulatory news.

The European Council has proposed to ban generic environmental claims such as “eco-friendly”, “green”, or “climate neutral” if they cannot be substantiated by a publicly accessible certification scheme. The move is part of a revision of the Unfair Commercial Practices Directive and the Consumer Rights Directive to better equip consumers for the green transition.

The council also suggests using sustainability labels only if these are based on official certification schemes, are registered as certification marks, or are established by public authorities. It also notes the need to protect consumers from false claims about whether a product can be repaired and that they should be made aware about goods’ limited lifespan. Before negotiations can advance further, the European parliament has to adopt a position on the matter.

The European Commission and the European Investment Bank have agreed €18bn in financing for projects that tackle the global climate finance gap through prevention, adaptation and mitigation efforts. The funding is part of an EU investment strategy targeting the bloc’s partner countries across the globe, called “global gateway”, which aims to increase investment in climate action, clean energy and connectivity. The strategy aims to assemble €300bn between 2021 and 2027 — of which the EIB will provide at least €100bn — to derisk private sector investments.

A report on the EU’s “cohesion policy” shows that energy efficiency, renewable energy, green infrastructure and improved wastewater facilities are set to benefit from several dedicated funds under the policy. Under the scheme, €545bn is set to be spent in investments between 2021 and 2027 to foster economic, social and territorial cohesion. According to the commission, green transition investments made under the scheme will directly contribute to the goals of the European Green Deal.

The German government has announced it will contribute €2bn to the Green Climate Fund, which aims to assist developing economies in climate mitigation and adaptation efforts. Approximately 50 countries have contributed a total of $18bn so far, with the US recently pledging a further $1bn to the fund. A Green Climate Fund conference is scheduled for October this year in Bonn.

The Asian Development Bank has announced a new climate finance facility in partnership with Denmark, Japan, South Korea, Sweden, the UK and the US. The “innovative finance facility for climate in Asia and the Pacific” could provide up to $15bn in new loans for climate projects in the region. The partnering countries would contribute by financing a range of grants for project preparation, as well as stand as guarantees for parts of the bank’s sovereign loan portfolios. ADB states that it would be the first time for a multilateral development bank to adopt a leveraged guarantee mechanism for climate finance.

The Brazilian congress has passed a bill that would allow the issuance of carbon credits by companies that hold forest concessions. The bill is seen as a first step in regulating the country’s carbon credit market, which at present is not backed by any legislation. Brazilian president Luiz Inácio Lula da Silva will now have to decide whether to sign or veto the bill. 

 

A service from the Financial Times