04 Nov 2019
European Union countries and lawmakers will start negotiations to set standards on sustainable investments on Wednesday, with a battle expected over whether oil, coal and nuclear fuel can count as "green"
The talks, due to finish in December, will pit the more conservative EU countries against a European Parliament, where Green parties have a louder voice.
The European Commission first proposed legislation in May 2018 to tackle "greenwashing", the process by which banks and other companies claim environmental credentials they do not deserve.
The European Council, made up of the bloc's 28 member states, generally supports the Commission's proposals.
EU lawmakers want to go further by making clear distinctions between what is sustainable and what is not. The parliament has singled out financing of solid fossil fuels such as coal, saying this could not be called "sustainable" in any way.
The Council and Commission want a more wide-ranging law, that would not have a specific list of green investments, leaving the door open for nuclear energy, for example, to be considered sustainable.
Both the Council and parliament hope the regulations and a general law can be established by the end of 2021 and come into force by the end of 2022.
But without a specific list of what is a green investment and what is not, lawmakers complain that the process could delay the law's implementation.
Any delay on introducing eco-labels on financial investments could deter investors from buying green bonds and eco-friendly assets.
Brussels proposed the law as part of a plan to make Europe the world's first climate neutral continent by 2050 but also to widen the market in green bonds and securities.
"Sustainable finance is a great opportunity for the euro," Thierry Roland, head of global banking at HSBC Europe, told a conference in Brussels in September, as the market for green bonds is mostly denominated in euros, unlike many other assets which are priced in dollars.
Last week, the EU launched new rules and standards for trillions of dollars of private and public "green" investment together with China, India and several other countries at an meeting of International Monetary Fund in Washington D.C.