Banks and businesses in the EU who manage clients' assets will in the future have to provide detailed information about their investments' climate impact according to an agreement reached in early March by negotiators for the European Parliament and the EU member states. The measure is designed to prevent the so-called "greenwashing" of financial products. Parliament and the member states still have to give their official approval to the agreement before it can be implemented.
The European Union is aiming to reduce its greenhouse gas emissions by 40 per cent by 2030, compared to 1990 levels. It's part of the bloc's commitment under the 2015 Paris Climate Agreement. According to estimates by the European Commission around 180 billion euros in additional climate-friendly investments are needed per year in order to meet the goal.
Last year, the Commission made a number of proposals to increase the sustainability of financial markets. In February 2019, an agreement was reached to mark financial products with a "Paris label" if they are in line with the Climate Agreement. To this end, experts are to draw up a list of companies that can prove they adhere to the Paris Agreement goal of keeping global warming below 1.5 degrees Celsius above pre-industrial levels.
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