The WWF and several other NGOs have decided to suspend their participation in the European Commission’s Sustainable Finance Platform in protest against what they see as weak and “unscientific” criteria for bioenergy and forestry in the EU’s green finance taxonomy.
The global conservation group made the announcement on Wednesday evening (21 April), hours after the Commission unveiled a new set of rules spelling out detailed criteria that companies need to comply with in order to win a green investment label in the EU.
“With this step, WWF is protesting against both the greenwashing of the forestry and bioenergy criteria in the climate taxonomy, and the process that led to these criteria,” the WWF said in a statement.
Other green NGOs that decided to leave the platform include Transport & Environment (T&E), BirdLife, the European consumer organisation BEUC, and ECOS, an environmental group campaigning for green product standards.
The European Commission’s green taxonomy rule book, unveiled on Wednesday, introduces a labelling system for investment that could divert hundreds of billions in funds to industries and companies that win a “sustainable” label for all or part of their activities.
It covers 13 sectors, including renewable energy, transport, forestry, manufacturing, buildings, insurance and even the arts, which together account for nearly 80% of EU greenhouse gas emissions, the Commission said.
But environmentalists say the taxonomy’s forestry criteria are too weak because they classify industrial logging and the burning of trees and crops for energy as ‘sustainable’ investments.
“The Commission’s final taxonomy on forestry and bioenergy does not acknowledge the environmental challenges we face. It has been strongly influenced by unbalanced lobbying by Finland and Sweden: it is at odds with environmental science, discredits the taxonomy and creates a disastrous precedent,” said Sébastien Godinot, an economist at the WWF’s EU office.
BEUC, the EU consumer organisation, said the EU taxonomy “risks becoming little more than a greenwashing tool” after the Commission’s decision to include forestry and bioenergy in the first batch of taxonomy rules.
The WWF, together with other environmental groups and scientists, sent an open letter to the EU executive last month to raise concerns about what they described as “unscientific criteria” in the Commission’s proposal.
“Should politics and lobbying prevail over science, it is our responsibility to inform you that we would be forced to reconsider our contribution to the Platform,” the group wrote in the letter, dated 31 March.
Sandrine Dixson-Declève, president of the Club of Rome and one of the advisers sitting on the group, told EURACTIV she was considering leaving as well.
“I have told the Commission that if major changes are not made, I will step down,” she told EURACTIV in emailed comments. “I have said since December that the process was no longer science-based,” she added, expressing concern that the taxonomy has become overly politicised.
“The current delegated act is a political deal. It’s not as bad as it could have been but still, it is in some areas the result of random last minute political bartering rather than scientific and technical evidence. I continue to find this very disturbing. If the Platform carries out two years of painstaking analysis and the same result occurs then this is a waste of my time and expertise,” she said.
Taxonomy rules need to be ‘politically acceptable’, EU admits
The European Commission said it is “aware of the concerns raised” by NGOs and “committed to reflect on how to improve the process on how technical screening criteria are being developed and set.”
However, the EU executive also defended the proposal tabled on Wednesday, saying it is “the best possible package at this current juncture,” given the political sensitivities over nuclear, gas and other energy technologies.
The criteria laid down in the taxonomy rules “have to be science-based, usable and politically acceptable,” said Daniel Ferrie, the Commission’s spokesperson on financial services. “It is the responsibility of the Commission to ensure the balance between these objectives while maintaining the credibility of the criteria,” he told EURACTIV in emailed comments.
Environmentalists are not the only ones ringing the alarm bell about forestry and bioenergy.
Pascal Canfin, a centrist MEP who chairs the European Parliament’s environment committee, said he shares their concern. “The NGOs are fundamentally correct: the taxonomy proposals are insufficient in terms of forest protection,” he told EURACTIV in an interview before the Commission unveiled its final proposal.
However, Canfin refrained from pointing the finger at the European Commission. According to him, the taxonomy’s forestry criteria is the result of “colossal” pressure exerted by Sweden and Finland, which rely on biomass for a large share of their energy consumption and have pushed for weaker rules.
“The Commission’s reasoning is pragmatic: it must avoid a blocking minority” in the Council of Ministers where it is already facing resistance from eastern EU member states over natural gas, Canfin said.
What is disturbing, he continued, is that the ruling coalitions in both Finland and Sweden are made up of Greens and Social Democratic parties.
“So we come to the rather bewildering conclusion that it is the Social Democrats and the Greens in Finland and Sweden who are weakening the taxonomy. Well done!”
Platform ‘will continue’, EU Commission says
Speaking on Wednesday, the EU Commissioner for Financial Services Mairead McGuiness insisted that the taxonomy “is a living document” that “will evolve with science and technology”. Updates to forestry and bioenergy rules will be made when changes are introduced to the renewable energy directive, which will put up for a revision later this year, she said.
McGuiness also defended the political compromises made in the proposal.
“The underpinning of the taxonomy has to be science-based but you cannot divorce the science from the real world and real concerns,” she said in reference to controversies around gas, nuclear and forestry.
“And that’s how it should be so we can design the best possible mechanism so that the European Union not only leads but does it with credibility,” she said.
Contacted by EURACTIV, the European Commission remained evasive about the implications of the NGOs’ departure from its Platform on Sustainable Finance. It is not clear yet whether new members will be invited to join the group or whether it will simply move on without them.
“The work of the Platform will continue, with no changes to the scheduled deliverables,” said Daniel Ferrie, EU Commission spokesperson for financial services.
The advisory group brings together representatives from the corporate and public sector, ranging from industry, academia, civil society and the financial industry. According to the EU executive, it “plays a key role” in forging a consensus on green finance “by bringing together the best expertise on sustainability” coming from these different horizons.
Nathan Fabian, the chairman of the group, said the platform “will now continue its important role” in support of the Commission’s green finance agenda. In comments published on Twitter, he said the platform “has a full program of activities coming up” with new proposals coming up to extend the taxonomy to new categories of environmental performance.
[Edited by Zoran Radosavljevic]