€350bn investment needed over nine years to meet Europe's climate challenge

'For the first time, there is an emphasis on the economic opportunities of decarbonisation,' environmental meeting told. File picture

An additional €350bn in investment is needed across a range of sectors over the next nine years to meet the climate challenge in Europe.

That is according to the European Investment Bank (EIB) chair on climate change policy Professor Jos Delbeke. 

He told a joint Institute of International and European Affairs and Environmental Protection Agency event that while somewhat comparable to post-war reconstruction after World War II, this time the continent is better-equipped.

"Of course it was brutal in 1945 with the destruction that the continent was going through. So let us not go for such a radical destruction, but let's phase in a cost-effective manner, the reduction of emissions... I'm more hopeful that we have not to go through such a disastrous new reality as we saw in 1945," he said.

European countries devastated by war rebounded strongly, contrary to pessimistic predictions in the aftermath of the great conflict, with "economic miracles" occurring all over the continent.

What we are seeing through the European Green Deal is an economic strategy, said Prof Delbeke.

"For the first time, there is an emphasis on the economic opportunities of decarbonisation," he added.

'Greenwashing'

So-called 'greenwashing' will be tackled by the EU's taxonomy, he said.

Greenwashing refers to the practice by firms and organisations of boosting their environmental credentials and image through slick marketing and evidence-free or out-of-context claims.

The EU's taxonomy refers to a classification system that "would provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable", according to the bloc.

A common language and a clear definition of what is sustainable are needed, according to the EU.

Prof Delbeke said: "Plenty of companies say they are green, but are they actually? Through the EU's taxonomy measure, we see a definition for what green actually means for the private sector. This will reduce, or hopefully, eliminate, so-called greenwashing. Nuclear and gas are left out, and the jury remains out on whether this is sustainable."

He hailed the newly introduced Sustainable Finance Disclosure Regulation (SFDR) as the "new kid on the block" in combating unsustainable practices and errant claims about green credentials.

The SDFR, also known as the disclosure regulation, compels investment funds to tell potential investors whether their money is going towards sustainable practices and assets.

"The SFDR is a new kid on the block in the sustainable finance toolbox, and it is under the responsibility of Ireland's Commissioner, Mairéad McGuinness. This will be a very important initiative to green the financial activities of the private sector," Prof Delbeke said.