The European Union is not doing enough to steer its own spending away from polluting activities or to mobilise private funds for green investments, the European Court of Auditors (ECA) said.
The EU is revamping its financial regulations to help raise money for projects that support its climate change targets, including through its “taxonomy”, a complex new rule book to tell investors which activities are truly green.
While the EU executive Commission’s proposals will make clearer which activities are sustainable, the ECA said in a report, they do not do enough to discourage investments that harm the climate.
“Unsustainable activities are still too profitable,” said ECA member Eva Lindstroem, who led the report.
The European Commission accepts or partially accepts the auditors recommendations, a spokesperson said, adding that work on the taxonomy is ongoing.
The EU’s sustainable finance taxonomy has triggered a battle between its member states, who disagree on which investments should be labelled “green”.
Brussels has delayed until later this year a politically sensitive decision on whether gas and nuclear energy will be included in the rules. The Commission’s advisers have said gas power plants should not be considered sustainable, and and have raised some concerns about nuclear energy