The Brussels effect on sustainable finance – MENAFN.COM

The Brussels effect on sustainable finance – MENAFN.COM

NEW YORK “” Europe continues to lead the world in climate action. In the last week alone, the European Parliament and Council reached a provisional agreement enshrining in law the objective of reducing greenhouse-gas emissions by 55 per cent by 2030 and reaching net-zero emissions by 2050. And the European Union published its long-awaited 'sustainable finance taxonomy' “” a move that could become a global standard for green investment and transform capital markets. In the last half-decade, public, corporate, and investor awareness of environmental, social, and governance (ESG) risks has risen sharply. ESG investments expanded exponentially during the pandemic, and are now one of the world's fastest-growing asset classes “” a trend that is set to continue. Likewise, the social, green and sustainability bond market has boomed in recent years. Between 2015 and 2019, worldwide issuance increased more than six-fold; last year, total sustainable bond issuance surpassed $1 trillion. The EU has played a central role in driving this progress. It was the European Investment Bank that issued the world's first green bond in 2007, and the EU remains a global hub of ESG bonds today. Furthermore, the euro is the global currency of choice for sustainable finance. About 50