The weather extremes in 2021 have shown the threat of climate change is real and immediate action is required to reach our ambitious climate goals by 2030 and 2050 respectively. For reaching Europe’s overarching targets, sustainable finance is one of the most important instruments to steer urgently needed investments towards more sustainable technologies on the path towards climate neutrality in 2050.
The EU Taxonomy is a good and right approach to provide transparency on the (financial) market, as it will help consumers and potential investors to know what is really sustainable and to prevent greenwashing. Yet, some classifications and technical criteria in the first texts of the EU taxonomy remain incoherent and need to be modified accordingly:
First drafts of the climate taxonomy have failed to capture the contribution of some industrial automation equipment and systems, such as motors and variable speed drives in terms of GHG emission reduction. Therefore, we call for an inclusion of all industrial automation equipment and systems in the EU taxonomy, to further unlock their potential to decarbonise the European economy.
While the recommendations of the Sustainable Finance Platform to amend and complement the existing ‘climate taxonomy’ certainly go into the right direction – we support the proposed inclusion of electrical manufacturing in the EU green taxonomy – it still falls short of properly covering the full chain of electrical manufacturing by focusing too much on connected devices only. To recognise the importance of the manufacturing of electrical equipment as an enabler for decarbonisation, the description of the activity should indeed cover the manufacturing of high, medium and low voltage electrical equipment, systems for electric grids and should also open up towards non-connected devices, altogether complementing section 4.9 of the existing climate taxonomy.