Powering tomorrow Navigating the energy transition landscape 2024 - Flipbook - Page 26
Investing in a
cleaner future:
Sustainable finance
issues to watch
International agreements have set
ambitious goals for the energy transition
that will require an estimated US$44
billion in global investments by 2030.
Yet as stakeholders attempt to catalyze such
investment, they face signi昀椀cant challenges—
from growing concerns over greenwashing to
evolving regulations to political backlash.
As the next few years will be crucial to the
sustainable investment sector, new developments
in the European Union (EU), the United States
(U.S.), and the United Kingdom (UK) may be
a harbinger of what’s to come. Here are some
key trends business leaders and investors should
be tracking.
EU standards provide structure and guidance
for investors
The European Commission’s Sustainable
Finance Action Plan lays out a strategy to
strengthen the EU’s connections between
昀椀nance and sustainability, with the goal to
reorient capital 昀氀ows toward a more sustainable
economy, make sustainability a mainstream
component of risk management, and foster
transparency and long-termism around
sustainability in the 昀椀nancial sector.
The Plan’s 昀椀rst key action item, developing
a clear and detailed taxonomy system for
“economic activities that are aligned with
a net zero trajectory by 2050 and broader
environmental goals,” was accomplished
in 2020. It now informs two new pieces of
regulation coming into force as part of the plan:
the EU Green Bond Standard and the Corporate
Sustainability Reporting Directive.
Tier 1
Energy: Transactions
Legal 500 Germany, 2023
26
Earlier this year, the EU published its longawaited Regulation on European Green Bonds
(EuGBs), also known as the EU Green Bond
Standard, along with optional disclosures for
sustainability-linked bonds and those marketed
as environmentally sustainable. By creating
a voluntary standard for green bonds and
imposing harmonized rules and standards,
the EuGB regulation aims to increase market
e昀케ciency while making it easier for investors to
compare bonds that have positive sustainability
impacts and contend with greenwashing issues.
Hogan Lovells | Powering tomorrow: Navigating the energy transition landscape
