30 businesses, investment groups and scientific institutions have sent a letter to the European Investment Bank, calling on it to deliver on its recent proposal to stop investing in fossil fuel projects by the end of 2020. The letter joins a similar call on the EIB from over 70 NGOs.
In its draft energy lending policy published in July 2019, the EIB recognised that achieving net-zero emissions was necessary to ensure our planet remains safely within the boundary of 1.5C of global warming. In this vein, it made a commitment to halting fossil fuel investments by the end of 2020, while focusing on the energy efficiency first principle, renewable energy and supporting a “just transition” for workers in high-carbon sectors.
The EIB proposal echoes the call to shift away from fossil fuel investments in The Planetary Emergency Plan – written by The Club of Rome with the scientific support of the Potsdam Institute for Climate Impact Research (PIK). The Plan sets out 10 urgent actions in order to achieve the social and economic transformations needed to secure the long-term health and well-being of people and planet.
The signatories of the letter (which include the Potsdam Institute, We Mean Business, UNPRI, The Corporate Leaders Group) join The Club of Rome in recognising that the EIB’s pledge to pull out of new fossil energy lending has already sent an important signal to financial markets and institutions across the globe and heralds a changing tide in the flow of global financial capital.
With a final decision on the draft energy lending policy due on 15th October, the signatories are urging the EIB not to backtrack on its progressive and ambitious leadership both in terms of the 2020 date and the scope. They believe its decision could set a precedent for other financial institutions to follow suit and mark a fundamental shift in global investment decisions, as countries worldwide seek to achieve their 2050 goals of climate-neutrality and meet their obligations under the Paris Agreement.
Sandrine Dixson-Declève, President of The Club of Rome commends the EIB for its ambition but asks the Bank to stand firm against any watering down of the original proposal as other MDB’s and Central banks will follow the EIB’s lead “I am encouraged by the efforts of the EIB to make their lending policy coherent with the goals of the Paris Agreement and the EU’s 2050 target but am extremely disappointed to hear certain Members States and the European Commission are calling on the EIB to weaken its proposal. The EIB decision, if confirmed, is critical as the world edges towards 2020, a ‘Super Year’ for international policy action on climate change, biodiversity, the oceans and sustainable development. Pulling out of fossil energy lending by the end of next year alongside an elimination of fossil fuel subsidies is imperative to shift capital to the low carbon energy transformation required. Such leadership is a must to become Europe’s Green Bank and move towards new Green Deal objectives.”
Johan Rockström, Director of The Potsdam Institute adds “The science could not be any clearer – and we know the technology we need is here. Decarbonization has already begun, and the appeal of a fossil-fuel-free world is growing – not only because it would limit climate change, but also because it would be more technologically advanced, democratic, resilient, healthy, and economically dynamic. Europe must continue to show leadership through a low carbon lending policy.”
Nigel Topping, CEO, WMB “Over 1000 leading companies are already committed to bold climate action, through the We Mean Business coalition’s Take Action campaign. More than 650 of these companies have aligned their businesses with the goals of the Paris Agreement by committing to set science-based targets. The EIB and other MDB’s will support a managed energy transition that is Paris aligned by sticking to their commitment to end investment in new fossil fuel sources. The alternative will encourage poor capital investment discipline, growing stranded assets and a damaging and disorderly transition.”
Monica Frassoni, President, The European Alliance to Save Energy (EU-ASE) “We welcome the EIB’s proposed new energy lending policy. It is urgent to reverse the trend of emission increase and ensure the European economy becomes climate proof by choosing a more sustainable, highly efficient and circular productive model within the next decade: the financial system has a major responsibility in helping funding a just transition. The recognition by the EIB of the Energy Efficiency First principle in its energy lending assessments is a turning point in the way public and private funds are to be allocated in the energy sector and beyond.“
Nick Mabey, CEO, E3G agrees that “ The new European Commission has set a bold vision for the EU on a pathway to effectively eliminate fossil fuel use and deliver a Green Deal for all. But he continues “As the “EU Bank” the EIB must have the mandate to lead these reforms. Member States and the European Commission must stop blocking the EIB’s move to stop funding risky gas projects and agree a new energy policy that enables it to become the world’s leading public “Climate Bank”.
Sean Kidney, CEO Climate Bonds “The science of the past year has given us a shock! To achieve the urgent emission reductions we need there is no longer any room for unabated fossil fuels! The proposed EUTaxonomy makes this clear; the EIB policy reflects this critical new understanding”.
For more information and interviews:
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Till Kellerhoff, Program Manager, The Club of Rome
George Biesmans, Project Manager, The Club of Rome
1. The drafts of the EIB Energy Lending Policy can be found here.
3. The Club of Rome – Emergency Plans
The original proposal of the EIB to stop investing in fossil fuel projects by the end of 2020 corresponds to the Climate Emergency Plan of the Club of Rome, issued in November 2018 and the Planetary Emergency Plan, issued by the Club of Rome with the scientific support of the Potsdam Institute for Climate Impact Research (PIK) on September 24th 2019. Both plans set out clear actions and commitments to be taken for the necessary social and economic transformations needed to secure the long-term health and well-being of people and planet.