EIB must ensure 50% of lending goes to climate and environment
11 NGOs are calling on the European Investment Bank to ensure its response to the Covid-19 health crisis is aligned with the EU Green Deal and helps stimulate a green economic recovery in Europe.
The EIB has announced a €40 billion recovery package as well as a €200 billion guarantee fund, and a further €5.2 billion for financing outside the EU.
Prior to the pandemic, the EIB had begun taking steps to become the EU’s ‘climate bank’ as set out in the priorities of the European Commission, committing to end all fossil fuel funding from 2021 and have 50% of its annual lending be climate and environment-friendly by 2025. In their letter, sent to the EIB president today, the NGOs urge the bank to use the recovery package to make further steps in this direction.
Sébastien Godinot, Economist at WWF European Policy Office said: “The EIB must stamp its ‘EU Climate Bank’ credentials all over its recovery package and guarantee fund. This means aligning them from the get-go with the European Green Deal and the EIB’s own target of 50% climate and environment spending. It must also make its support to companies conditional on them committing to align with the Paris climate agreement.
“If we get this right, we craft a resilient economy which works for people and nature. If we get it wrong, we lock-in polluting sectors which will only make us more vulnerable in future. The EIB’s actions will be crucial in setting the direction”, said Godinot.
Yesterday, the European Commission’s financial ‘technical expert group’ (TEG) called on the EU for a green recovery based on the EU taxonomy they helped develop, which will show which investments can be called “green”. The EIB is a member of the TEG.
“The EIB as part of the TEG has shown that it stands behind a green European recovery. Now it must apply the rhetoric to its own operations”, concluded Godinot.
The letter was signed by: CEE Bankwatch, CounterBalance, Urgewald, Observatori del Deute en la Globalizació, Les Amis de la Terre France, 350.org, Oil Change International, Greenpeace European Unit, WWF European Policy Office, Partnership for Policy Integrity, Friends of the Earth Europe.
In their letter, the NGOs call for the EIB to:
Align the new financing with its transition to the EU Climate Bank and its role in financing the European Green Deal.
Uphold its commitment to align all EIB operations with the objectives of the Paris Agreement by 2020.
Align the recovery with existing EIB policies, such as the new Energy Lending Policy, but without any financing for gas.
Adopt its Climate Bank Roadmap (CBR) this year as planned.
Make its support to companies conditional on their implementing Paris-aligned, timebound transition plans, building on the Science-Based Target initiative for example.
Adopt and implement Paris-aligned sectoral policies, particularly in high-carbon sectors such as transport, industry, agriculture - building on the EU Taxonomy. Operate with greater transparency to ensure effective monitoring of its alignment with the European Green Deal.
No longer fund new airports and motorways.
Apply the same conditions to financing outside the EU, to ensure it does not support unsustainable activities in developing countries.