{"id":2487,"date":"2022-01-24T14:10:10","date_gmt":"2022-01-24T13:10:10","guid":{"rendered":"https:\/\/fair-alpha.org\/?p=2487"},"modified":"2022-08-03T10:42:12","modified_gmt":"2022-08-03T09:42:12","slug":"eu-taxonomy-politics-was-too-slow","status":"publish","type":"post","link":"https:\/\/fair-alpha.org\/en\/eu-taxonomy-politics-was-too-slow\/","title":{"rendered":"EU taxonomy: \u201cPolitics was too slow\u201c"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>The EU\u2019s intended classification of investments as ESG-compliant or sustainable will hardly change the investment decisions of institutional investors. \u201cThe market is already much further ahead than policymakers when it comes to setting standards, and the taxonomy is a step backwards in this regard\u201d, said Tim Faltis, Board Member at FAIR ALPHA. \u201cIn its current form, it ultimately only benefits those who are not that serious about sustainability anyway.\u201d<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The consideration of the impact, the real effects of an investment decision, has become the standard for forms of sustainable investment. \u201cMany standards and regulations organised by the private sector, including strict auditing mechanisms, are already much better positioned\u201d, Faltis pointed out. In this respect, it is very unlikely that institutional investors will base their investment decisions on the less rigorous EU taxonomy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is at least true for those who are serious about their own sustainability standards. \u201cThe EU taxonomy, like the organic label, is the industry\u2019s lowest common denominator\u201d, said Faltis. And just as the organic label opened up access to the organic market for discounters, the taxonomy offers suppliers the opportunity to market their products as sustainable who shy away from the high standards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe see that the standard for Green Bonds, for example, which is controlled by ICMA, has gained acceptance in this segment\u201d, added Faltis. \u201cSo we wouldn&#8217;t issue green bonds for initiators who don\u2019t operate according to the high standards.\u201d Also, many institutional investors and corresponding industry associations such as the IIGCC (Institutional Investors Group on Climate Change) are willing to go further than the taxonomy dictates. \u201cThese companies and institutions are actively concerned with sustainability and speak out clearly against nuclear power or gas, for example\u201d, said Faltis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The actual purpose of the EU taxonomy is therefore not being achieved: to unify international standards and thus direct capital in such a way that the EU\u2019s climate targets for 2030 and 2050 are met. \u201cPolitics was too slow\u201d, Faltis explained. \u201cBusiness needed clarity sooner, so they were quicker to create and establish standards that were way ahead of the taxonomy.\u201d The way the taxonomy has been proposed and the ongoing discussion on how to assess nuclear power and gas as sustainable, the EU requirement will have little or no impact on investment behaviour.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cNonetheless, it was the hope of many market participants to obtain a unification of standards and clear definitions for sustainable investments through the taxonomy\u201d, Faltis highlighted. This would create clarity, transparency and thus extensive credibility, which the current version does not provide. \u201cPerhaps the work can still be revised and improved, not in the first round, but then on an ongoing basis\u201d, said Faltis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/fair-alpha.org\/wp-content\/uploads\/2022\/03\/EU-taxonomy-Politics-was-too-slow-01.24.2022.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Download press release!<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The EU\u2019s intended classification of investments as ESG-compliant or sustainable will hardly change the investment decisions of institutional investors. \u201cThe market is already much further ahead than policymakers when it comes to setting standards, and the taxonomy is a step backwards in this regard\u201d, said Tim Faltis, Board Member at FAIR ALPHA. \u201cIn its current [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"1200","_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[51],"tags":[],"class_list":["post-2487","post","type-post","status-publish","format-standard","hentry","category-all"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - 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