Germany hesitates on support for European green finance taxonomy

Germany is wavering at the last minute to make a decision on whether to support an EU taxonomy for green financial activities that aims to identify the investments that will be regarded as sustainable in the future, reports Michael Bauchmüller in the Süddeutsche Zeitung. The economy ministry (BMWi) had previously called for a broader range of projects to be considered green, including ones involving natural gas. If Germany abstains, majority support for the taxonomy in its current form could be lost. "Anything but a vote for the present text of the taxonomy ordinance would be a clear contradiction of the German government's self-imposed goal of making Germany the leading sustainable finance location," commented Kristina Jeromin, member of the government's Sustainable Finance Advisory Council. The decision is set to be made today, Wednesday, on the margins of the UN climate summit COP25.

The German government is working to better integrate finance and climate policy and has set up the Sustainable Finance Advisory Council to sound out possible steps for ensuring that lending and investment decisions contribute to emissions reduction rather than undermine it. Earlier this year, the finance ministry (BMF) said that the state's budget could be screened for 'green expenses' to back the environmental credentials of future green bonds.