So that the aviation sector contributes towards meeting the European Green Deal objectives, investment in aviation should target sustainable projects and activities. But how should we define ‘sustainable’? The European Commission contracted a study to answer this question. The results, just published, will help the Commission supported by the Platform on Sustainable Finance to design a methodology to assess the likely green impacts of investment in the aviation ecosystem.
The 2019 European Green Deal resets the Commission’s commitment to tackling climate and environment-related challenges, setting the objective of having no net emissions by 2050. How the transport sector can contribute is set out in the Commission’s Sustainable and Smart Mobility Strategy, presented in December 2020. The strategy recognises the need for a significant increase in sustainable infrastructure investment, while the EU initiative on Sustainable Finance recognises the need for mechanisms to identify sustainable investment options, on a sector-by-sector basis.
The study confirms the challenges that aviation faces in proving the sustainability of its decarbonisation activities. This, in turn, explains investors’ continued reluctance to mobilise sufficient green capital for the sector. The study suggests that a clear vision of what constitutes environmentally sustainable aviation activities, combined with a balanced approach to monitoring and the avoidance of greenwashing, would increase the attractiveness of investing in aviation for green finance investors.
Clear technical criteria will be key, and ultimately the resulting EU taxonomy would facilitate investment in sustainable projects and activities in aviation and help the sector to decarbonise.
The Taxonomy Regulation was published in the Official Journal of the European Union on 22 June 2020 and entered into force on 12 July 2020. It sets out conditions that an economic activity must meet to qualify as environmentally sustainable.
The current COVID-19 pandemic has reinforced the need to redirect capital flows towards sustainable projects in order to make our economies, businesses and societies, in particular health systems, more resilient against climate and environmental shocks and risks.
The action plan on financing sustainable growth called for the creation of a common classification system for sustainable economic activities, or an ‘EU taxonomy’.
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