EU green regulation ‘poses risks for CEE’
Critics question whether the bloc’s taxonomy will work for emerging Europe.
New European Union regulation on sustainability could have a disproportionate impact for emerging Europe, banking and housing, experts have warned.
Speaking at Euromoney’s virtual CEE Forum on January 13, Jennifer Johnson of the European Mortgage Federation highlighted the risks posed to the region by the EU’s taxonomy for sustainable activities.
From January 2022, the taxonomy will define which businesses and transactions within the bloc can count as sustainable for the purposes of financing. Initially, it will only cover climate change, although four more environmental objectives – water, circular economy, pollution control and biodiversity – are due to be added by 2023.
Markets with less well-performing building stock... will potentially suffer
The taxonomy has already proved controversial.
Critics argue that the criteria, which require an activity to “contribute significantly to climate change adaptation or mitigation”, are too restrictive.
A one-month consultation on the regulation that closed on December 18 attracted more than 46,500 responses.
With regard to housing, Johnson – who is also deputy head of the European Covered Bond Council – described the European Commission’s approach in the taxonomy as “very ambitious”.