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), including 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 EIB is developing its Climate Bank Roadmap (CBR) to provide an operational framework for its activities on Climate Action and Environmental Sustainability. In the context of the CBR, the EIB started to prepare the ground for the work on the Environmental Sustainability objectives of the EU Taxonomy by developing an internal set of definitions and associated technical criteria for EIB’s Climate Action and Environmental Sustainability activities that would allow it to start tracking its specific CA and ES finance starting from January 2021. This interim set of definitions will then be adjusted as the work of the EU Platform on Sustainable Finance (particularly on the Taxo4 environmental objectives) progresses.
Each Division in the EIB’s technical Projects Directorate (PJ) has been tasked with developing its own set of sector-specific, Paris alignment, CA and ES tracking indicators, and the respective criteria required to be met for all CA and ES aligned activities. To date, the Agribusiness and Rural Development Division (AGRUDEV) has identified Paris aligned activities as well as investment categories making substantial contributions to CA and ES objectives in the sectors of their responsibility, and also started identifying specific criteria and thresholds to be met by each activity.
The project is conducted by Trinomics in collaboration with WS Atkins (lead), Carbon Trust, ADAS and Pescares Italia. The project will run from October 2020 and will finish by April 2021.
This investigation provided the following preliminary results:
- Develop guides for the identification, tracking and monitoring of investments that entail substantial contribution to CA and/or ES for AGRUDEV sectors;
- Support EIB activities in relation to the EU working groups in defining the EU Taxonomy on Sustainable Finance; and,
- Provide support to other related activities in the area of AGRUDEV responsibility in the context of EIB’s increased ambition in terms of climate and environmental sustainability.