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EU Parliament & member states agree on low-carbon benchmarks to boost investment in sustainable projects

"Sustainable finance: Commission welcomes agreement on a new generation of low-carbon benchmarks", 25 Feb 2019

The Commission welcomes the political agreement reached by the European Parliament and Member States today on a new generation of low-carbon benchmarks needed to help boost investment in sustainable projects and assets. The European Parliament and Council still have to formally approve the rules. This agreement creates two new categories of low-carbon benchmarks: a climate-transition benchmark and a specialised benchmark which brings investment portfolios in line with the Paris Agreement goal to limit the global temperature increase to 1.5˚above pre-industrial levels...Benchmarks have an important impact on investment flows. Many investors rely on them for the creation of investment products, for the measurement of performance of investment products and for asset allocation strategies.The two new categories are voluntary labels designed to orient the choice of investors who wish to adopt a climate-conscious investment strategy. The climate-transition benchmark will offer a low-carbon alternative to the commonly used benchmarks.The Paris-aligned benchmark will only comprise companies that can demonstrate that they are aligned with a 1.5˚ target. The new labels are designed to give additional assurances to avoid “greenwashing”, i.e. that investors are deceived by misleading or unsubstantiated claims about the environmental benefits of a benchmark. A technical expert group will now advise the European Commission on how to select the companies eligible for inclusion in the new benchmarks. 

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