To support a transition to carbon neutral economy in Europe, an additional investment of €260 billion ($288 billion) annually from private and public sector is needed, according to a new economic strategy unveiled Wednesday by the European Commission.
Know as the European Green Deal, the strategy focuses on investments and loans needed to enable moving to a recycling-based economy, stopping climate change and reversing biodiversity loss.
Among key upcoming initiatives, the commission said it will present a green financing strategy in the third quarter of 2020, outlining how private sector companies could contribute to the financing of the energy transition.
However, before the strategy is revealed, the European Council and European Parliament must adopt the classification of sustainable investments, known as the taxonomy. Under the proposal it will be mandatory for companies and financial institutions to increase their disclosure on climate and environmental data to help investors' demonstrate how their portfolios meet taxonomy criteria for carbon emissions.
Within its first 100 days the commission is set to also publish its European Climate Law and its biodiversity strategy for 2030, as well as a new industrial strategy, circular economy action plan and sustainable food proposals.
Dedicating at least 25% of EU budget to climate action, the commission's president, Ursula von der Leyen, said in efforts to become a climate neutral by 2050, the deal transforms working, producing and consuming by EU citizens.
"We are determined to succeed for the sake of this planet and life on it — for Europe's natural heritage, for biodiversity, for our forests and our seas. By showing the rest of the world how to be sustainable and competitive, we can convince other countries to move with us," Ms. Von der Leyen said in a release.
Responding to the proposal, which is yet to be approved by the European Parliament and EU Council, Tanguy van de Werve, director general of European Fund and Asset Management Association, said in an email: "We wholeheartedly support the European Commission in this initiative. We are committed to playing our role as an industry in channeling the necessary funds for projects, which are essential to its success.
Mr. Van de Werve stressed that comparable, reliable and publicly available environmental, social, governance data on companies in investors' portfolios need to be available to meet the commission's ambitions.
Principles for Responsible Investment CEO Fiona Reynolds also welcomed the announcement.
"The broad scope of the deal — encompassing goals such as carbon neutrality, sustainable transport, a zero pollution Europe and a just transition — provides a clear framework for action from all areas of society," she said. "We look forward to working with the Commission, Parliament and PRI's signatories under the framework of the Deal."