EIB Climate Action and Sustainability Overview

The EIB’s Key Financial Support

The European Investment Bank (EIB) recently released an overview of what the organization has accomplished so far in terms of climate action, and what still needs to be done. Some of the goals the EIB had set out to achieve included an increase in the share of environmental sustainability financing to more than 50% of annual lending by 2025, to support 1 trillion in euros for climate action up to 2030, and align new activities with the Paris Agreement principles and goals.

In 2022 alone, they were able to dedicate €36.8 billion to climate action and environmental sustainability projects and were able to raise €70 million for sustainability-oriented projects (mainly concerning energy, biodiversity, and ecosystems) through the issuance of green and sustainability bonds. They have also highlighted their five-year plan to ensure their investments support the European Green Deal and will make Europe Carbon neutral by 2050.

Further emphasis is also being placed on the subject of biodiversity, and are shifting their Environmental Social Standards from “no net loss” to a stricter “no loss” of biodiversity to stay in line with EU policy.

Implications for Climate Disclosures in Financial Markets

It is clear that the EIB is taking meaningful steps towards meeting its climate transition goals, having invested most of its resources in sustainability-related projects in anticipation of a brighter future. There is also the special emphasis placed on biodiversity, which other organizations have raised the alarms for as well after the World Economic Forum identified biodiversity loss, natural resource crises, and human environmental damage as one of the biggest risks to the planet in their 2021 report. In the past year alone there have been more initiatives taken to reduce biodiversity loss, including creating more intricate reporting standards for investors and companies alike to provide better transparency on potentially harmful impacts to biodiversity and the ecosystem. More of these disclosures and improvements to reporting can be expected in 2023 as well.

There is also more emphasis placed on sustainability bonds, which are considered important tools for organizations looking to financially support the Paris Agreement alignment as well as incentivize more research into creating new operational methods for companies to reduce their environmental impact. In fact, some companies have already begun their journey of reducing impact and aligning themselves with the Paris Agreement principles.

Who’s Playing Their Role?

Some companies have aligned themselves with the Paris Agreement principles by signing the UN Nations Global Compact, which encourages businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation. Of course, this only goes so far if action is not applied accordingly to these principles. Luckily we found that certain companies that signed the UN Nations Global Compact have also demonstrated extremely low impact on biodiversity and natural resource use in general. The top five companies are the Elia Group SA, Enel S.P.A, Red Electrica Corporacion, National Grid PLC, and Koninklijke Vopak N.V. This is because these companies not only demonstrate a low impact on the ecosystem but also retain high environmental scores overall for their dedication to sustainable values.