European Commission could lower capital requirements for banks' green investments
The European Commission (EC) intends to present a comprehensive action plan in March 2018 with initiatives to stimulate the market for sustainable financial products: In Paris, the Commission announced a series of initiatives for a modern and clean economy, all reflected under the 10 political priorities (see EC press releasehere). The EC is committed to putting in place the necessary reforms to give the incentives to the financial sector to contribute to the green transition (for more info, here (pdf)). “We are looking positively at the European Parliament's proposal to amend capital charges for banks to boost green investments and loans by introducing a so-called green supporting factor. This could be done at first stage by lowering capital requirements for certain climate-friendly investments, such as energy-efficient mortgages or electric cars. We could model it on existing capital requirement adjustments for investments in SMEs or high-quality infrastructure projects”, said Valdis Dombrovskis, Vice-President for Financial Services, in a speech at the One Planet Summit. He added that the EC will propose to integrate sustainability factors into institutional investment mandates, so that “these criteria will be reflected in the duties that asset managers and institutional investors have towards those whose money they manage”. Dombrovskis also said an EU taxonomy for sustainable finance would form the basis for EU standards and labels for Green Bonds and Green Investment Funds, to accelerate green investments by all types of investors (RI, Reuters, 12 Dec) (speech here).Add paragraph text here.
UK PM announces new measures to tackle climate change
Prime Minister Theresa May announces that the UK will provide a £140 million boost to poorer communities around the world, disproportionately affected by climate change: (PA, The Guardian, 12 Dec). This will include an additional £30 million through DFID’s Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) programme. The Prime Minister also announced £15 million of additional support for reconstruction on the island of Dominica in the Caribbean, one of the regions that is most affected by extreme weather associated with climate change. This money will support reconstruction of the island's water system, which was destroyed by Hurricane Maria. “Tackling climate change and mitigating its effects for the world’s poorest are among the most critical challenges that we face. That is why I am joining other world leaders in Paris today for the One Planet Summit and committing to stand firmly with those on the front line of extreme weather and rising sea levels”, Prime Minister Theresa May said (Sky News, 12 Dec). She also announced that the UK will host a global zero-emissions vehicle summit in autumn 2018 (UK Gov press release here).