Local view for "http://purl.org/linkedpolitics/eu/plenary/2016-10-06-Speech-4-471-000"
| Predicate | Value (sorted: default) |
|---|---|
| rdf:type | |
| dcterms:Date | |
| dcterms:Is Part Of | |
| dcterms:Language | |
| lpv:document identification number |
"en.20161006.37.4-471-000"2
|
| lpv:hasSubsequent | |
| lpv:speaker | |
| lpv:spoken text |
"Mr President, now that EU has ratified the Paris Agreement, we have a tremendous challenge to decarbonise our economy, but also a tremendous opportunity. Humanity’s journey into the fossil fuel era was marked by the enclosure of common resources, monopoly control and the growth in inequality. Finding ways to develop and invest in renewable resources offers a wonderful opportunity to do things differently. This is why, as Greens, we believe that sustainable finance must also be equitable finance. The overwhelming majority of finance for the green transition so far is private finance. Through the creation of green bonds, bankers can make use of what financiers like to call ‘the magic of money’ to multiply an initial stock of capital many times over, with the value of this multiplication staying with the shareholders and employees of the bank.
So the need to invest in a sustainable future could be used to swell bank profits, exacerbating inequality. How much better it would be if the magic of money could be used for the benefit of the citizens of the world, if we funded the transition through public banking and through community ownership. Then the value of money creation could be invested for public good and the value of renewable energy could accrue to local communities. The German KfW Bank provides an excellent model of such a method of capturing the power of banking for public good and I think such a model should be at the heart of sustainable finance.
I have also championed the idea of green quantitative easing to ensure that some of the vast amount of money being created by the European Central Bank should be channelled towards green investments. I believe the Commission and Parliament need to work together to undertake a critical review of the impact of the current QE programme and find ways to ensure that it is redesigned to play a central role in the financing of the green economy in Europe.
For some time Greens in this House have been ringing the alarm bell about the systemic risk to financial services, products and companies from assets which are grossly overvalued in the context of the EU’s policies to tackle climate change. Since at least 75% of fossil fuel reserves have to be kept in the ground if we are to keep within the 2° global warming limit agreed in Paris, companies, banks and pension funds that have significant fossil—related assets on their books are vastly overvalued, a phenomenon known as the carbon bubble. McKinsey and others have estimated that 30% to 40% of fossil fuel companies’ value could be threatened by this carbon bubble. Mark Carney, Governor of the Bank of England, has responded to this alert, as has Mario Draghi, as evidenced in the report produced by the European Systemic Risk Board.
We have taken an important first step to tackle the carbon bubble in the specific case of pensions, as was mentioned by the Commissioner. The Parliament has voted that the extent of these stranded assets must be notified to the regulatory authorities, but we should not stop there. It is not only pensions that are at risk. Insurance companies are also holding large quantities of stranded assets. Both the European Systemic Risk Board (ESRB) and the Ecofin Council have discussed the idea of undertaking carbon stress tests for banks and we need to make urgent progress on that front. We should also consider other options put forward by the ESRB, such as regulatory loss absorbency requirements, specific capital surcharges based on the carbon intensity of individual exposure, and large exposure limits applied to the overall investment in assets deemed highly vulnerable.
We can also learn from others. France, for example, has introduced the world’s first mandatory climate disclosure requirements for institutional investors and the US Securities and Exchange Commission is now also taking steps towards mandatory disclosure requirements. The European Commission should make a proposal for similar legislation EU wide. These are just some of the actions governments and central banks are taking to address the risks posed by the carbon bubble. The EU needs to take similar action and, in this context, we welcome your proposal for a sustainable finance expert group.
Since the private finance market will inevitably play an important role in financing the transition, it is important that it is properly regulated and focused. The EU is proud of its leadership role on climate change, but is falling behind on the issue of sustainable finance. London has launched a green finance initiative and Luxembourg has followed suit, as has France. China is working on green finance, as is Bangladesh. There is a veritable climate finance race going on, with countries vying to be the first to turn their capital markets the greenest the fastest, investing in climate solutions instead of climate problems. The EU should set the highest standards in this field. In particular, we should introduce clear criteria for what constitutes a green bond. At present this is something of a Wild West, with bonds claiming green status on the flimsiest of justifications.
Vice—President Dombrovskis, we are pleased to see progress on this important issue since the departure of Commissioner Hill, but time is also pressing. International developments are moving fast, from the G20 Green Finance Study Group to the FSB Climate Disclosure Task Force. We should ensure that we are part of these developments, which is why it is so important that you move rapidly to establish your expert group and the publication of an EU sustainable finance strategy should not be far behind. This will give us enough time to come forward with timely legislative proposals.
So we welcome this opportunity to debate the economic opportunities offered by the urgent need to transition to more sustainable industrial and energy systems. We urge that the needs of climate and environment are placed first when sustainable finance is being developed and that attention is paid to the opportunities to achieve greater equity alongside greater sustainability."@en1
|
| lpv:spokenAs | |
| lpv:unclassifiedMetadata | |
| lpv:videoURI |
Named graphs describing this resource:
The resource appears as object in 2 triples