• Client: European Investment Bank (EIB)
  • Implementation period: 2018 - 2022 (Ongoing)
  • Geographic coverage: European Union, Global

How will EIB track and monitor its ambition for CA&ES finance by 2025?

The European Investment Bank (EIB)’s funding and lending practice could be a bellwether for sustainable investments. By acting as an interface between the dimensions of policymaking, project evaluation and technical assessment, the EIB is also helping the capital market to identify sustainable investment opportunities. Additionally, in November 2019, the EIB Board of Directors confirmed EIB’s increased ambition on Climate Action (CA) and Environmental Sustainability (ES).

Above includes the following commitments:

  • The EIB Group will aim to support €1 trillion of investments in CA and ES in the critical decade from 2021 to 2030;
  • The EIB will gradually increase the share of its financing dedicated to CA and ES to reach 50% of its operations in 2025, a target that could mean an expected volume of €30 billion per year;
  • The EIB Group will align all its financing activities with the principles and goals of the Paris Agreement by the end of 2020. In the near future, this will be complemented by measures to ensure EIB financing contributes to a just transition for those regions or countries more affected so that no one is left behind.
  • Aligning its financing activities with the European Union (EU) Sustainable Finance Taxonomy.

The fulfilment of the EIB’s future Climate Action (CA) and Environmental Sustainability (ES) commitments and targets, as well as the specific requirements of the EU Taxonomy, will require an adjustment of the way the EIB records, accounts, monitors, verifies and reports on CA first and successively on the ES aspects in all their financing operations. Regarding the ES objectives of the EU Taxonomy, EIB is seeking to anticipate part of the work that will be needed during the coming year by implementing an internal set of ES definitions and associated technical screening criteria that would allow the Bank to start tracking its specific ES spending starting already from January 2021. At the moment, in contrast to Climate Action, EIB does not have a well-established system and approach in place yet that could allow for tracking ES finance using a cross-cutting ES indicator under Pillar 1 of the 3 Pillar Assessment (3PA – for operations inside EU and EFTA)  or the Results Measurement framework (ReM – for operations outside EU).

The project is conducted by Trinomics in collaboration with WS Atkins (lead) and Pescares. The project will run from July 2020 and will finish by April 2022.

Earth in Heart shape on green grass on sunlight, Love and Save the World for the Next Generation concept, Earth day concept, Elements of this image furnished by NASA, http://earthobservatory.nasa.gov/IOTD/view.php?id=885

This investigation provided the following preliminary results:

The main objective of this assignment is therefore to support the EIB in the development and testing of an integrated CA&ES Finance Tracking System, allowing for its full adoption and inclusion in the EIB project cycle by January 2021. This includes the development of (interim) definitions and screening criteria of EIB activities and operations that provide a substantial contribution to the EIB ES objectives, ahead of the adoption of these indicators and criteria in a Delegated Act under the Taxonomy Regulation towards the end of 2021, including support to the first stages of the implementation of the CA&ES Finance Tracking System. As part of this assignment, our team develops of guidance materials (including MRV and QA/QC manuals) and rolls out dedicated training packages and workshops throughout the EIB Group (e.g. EIB/OPS, EIB/PJ sector teams, EIF, etc.). Moreover, our team actively supports in EIB in their contributions and inputs to external working groups (such as the EU Platform on Sustainable Finance) and reporting (e.g. audited annual sustainability report).