Climate and energy transition

More than forty local and regional leaders gathered on Friday (21 October) to learn more on sustainable finances during CEMR’s training academy.
 
Terms like “sustainable finance” or “Taxonomy” are part of the everyday Brussels jargon and are now trickling down to the local and regional levels. After the Paris Agreement in 2015, the European Commission launched an ambitious Sustainable Finance action plan on financing sustainable growth in 2018. At the heart of it is the EU Taxonomy, a classification instrument which attempts to define “sustainable” economic activities. In addition, private and public enterprises like municipal utilities will have to disclose environmental, social and governance information (so-called ESG factors) and report on the Taxonomy alignment.
 
The training provided territorial leaders basic scientific knowledge about the concept of sustainable finance. Itexplained the EU's sustainable finance framework, focusing on the EU Taxonomyand explored the role of local and regional governments in mobilising climate finance. The participants also shared best practices and funding opportunities for projects and sustainable financial products.
 
In addition to a panel on the regulatory architecture of sustainable finance, participants had the opportunity to discover the OECD subnational climate finance hub which offers local and regional governments insightful data and a self-assessment tool. Finally, representatives from the European Investment Bank and MuniFin, a Finish municipal credit institution, showcased projects which were enabled by sustainable financial products like energy efficiency renovations of 622 houses in the French region of Picardie.
 
According to the OECD Subnational Government Climate Finance Hub, local and regional governments accounted for 63% of total climate –significant public expenditure in 2019. However, the local and regional elected representatives stressed the need to take more into consideration the limited technical, administrative capacities in municipalities and regional administrations. A clear and understandable regulatory framework as well as more technical assistance by experts would be necessary to implement sustainable projects to fully align public investments with the Paris Agreement.