Mitarbeiter sonstige

The EU Sustainable Finance Strategy: proposals for reform and extension

Berensmann, Kathrin / Sören Hilbrich
Mitarbeiter sonstige (2024)

in: Christine Hackenesch / Niels Keijzer / Svea Koch (eds.), The European Union’s global role in a changing world: challenges and opportunities for the new leadership, Bonn: German Institute of Development and Sustainability (IDOS), 10-13

DOI: https://doi.org/10.23661/idp11.2024.2
Open access

The European Union (EU) has set itself the goal of reducing greenhouse gas emissions by at least 55% from 1990 levels by 2030 and becoming climate-neutral by 2050. Currently, financial markets are clearly not aligned with this goal as investments in environmentally harmful economic activities are still taking place at a large scale. For instance, global energy investments in fossil fuels still amounted to more than USD 1 trillion in 2023 and have even significantly increased since 2020 (after a dip during the pandemic) (IEA, 2023, p. 8). While the investments in environmentally harmful economic activities have to be stopped, substantial investments in the transformation of the economy are also necessary. For instance, the European Commission estimates that Europe will need additional investments of around EUR 350 billion per year in the energy sector in the current decade just to meet the 2030 emissions target (European Commission, 2021). To achieve climate neutrality and reach other sustainability goals, capital flows thus have to be redirected from unsustainable to sustainable economic activities.