Written by Zhuan Faraj

On 22 September 2021 the European Court of Auditors (‘ECA’) published a report on whether the European Commission has been taking the right action to redirect finance towards sustainable investments.

The report examines whether the Commission’s 2018 Sustainable Finance Action Plan addresses the key issues related to sustainable finance and was implemented on time. It also considers whether EU financial support follows consistent sustainability criteria and contributes to supporting sustainable investment.

The ECA recommended that the Commission:

• complete the measures of the Action Plan and clarify compliance and audit arrangements;
• better contribute to sustainable finance by pricing greenhouse gas emissions;
• report on climate and environment related results of InvestEU;
• increase efforts to generate a sustainable project pipeline;
• apply the “do no significant harm principle” and the EU Taxonomy criteria consistently across the EU budget; and
• monitor and report on the results of the Action plan and any future strategies.

For further information, please see the ECA’s report and press release. A copy of the replies from the Commission can be found here.