In line with the ambitious goal to make Europe climate neutral by 2050, the European Commission adopted a package of sustainable finance measures back in April 2021 aimed to encourage investment in green propulsion.
It will impact inter alia maritime transport, financial institutions, insurers, and large corporates.
The package is comprised of:
- A new Corporate Sustainability Reporting Directive (CSRD).
- The EU Taxonomy Climate Delegated Act.
- Sustainability Amendments of the six Delegated Acts originally published by the EC in June 2020.
A proposed Corporate Sustainability Reporting Directive: sets out in far greater detail the non-financial information that companies, including those involved in maritime should report in their Annual Report. As a result, financial institutions or end investors should be able to use sustainability information in their financial analysis.
The EU Taxonomy Climate Delegated Act (the “Delegated Act”): contains technical screening criteria to determine whether an economic activity qualifies as environmentally sustainable and is set to apply as of 1 January 2022.
Maritime transport is covered by comprehensive technical screening criteria that contain several details.
“The resulting technical screening criteria are compatible with the framework used by the International Maritime Organization (IMO), capture the diversity of vessels and business models within the sector and distinguish between new-builds and retrofitting. Currently there are no commercially viable zero-emission solutions for ocean-going vessels. Therefore, it is important to support the transition to zero-emissions vessels, including R&D on alternative technologies, fuels and infrastructure.” (source official website of EU).
By assessing which forms of maritime transport and related activities can be considered sustainable the EU Taxonomy for Sustainable Finance will help potential investors and companies to understand which investments are sustainable and which are not sustainable. Increase of investments in sustainable activities across the shipping industry is important to realize a green transition and continue the technological developments.
Sustainability Amendments: amendments to the six existing Delegated Acts on fiduciary duties, investment, and insurance advice to reflect a client’s sustainability preferences.
Conclusion: The Sustainable Finance Package is an important step to achieve the transition towards zero-emissions waterborne transport by 2050. It proposes a series of goals and actions the EU Commission can take into consideration when defining the next strategies in the field of the maritime industry.