Analysis of Green Finance definitions and implications for investments

The availability and effective use of financial resources are considered key preconditions for achieving the EU’s climate targets and environmental objectives. In this context, the European Commission aims at leveraging more private finance for investments in a green and circular economy. Yet, the lack of a clear understanding of the term “green finance” may result in financial markets not realizing their full potential and failing to provide the amount of finance required to reach the EU’s long term objectives and global commitments.

The European Commission seeks to understand better the different options for defining green finance as well as their implications for investors and investment decisions. In this context, it has commissioned a study on "Green Finance: Definitions and Implications for Investments", carried out by a consortium led by adelphi. The overall objectives of the study are to assess the global landscape of green finance definitions, taxonomies and criteria; suggest core elements of operational green finance definitions; and to propose and compare options relevant from a European public policy perspective. The study is based on an in-depth literature review as well as expert interviews. The results of the study directly feed into the work of the EU's High Level Expert Group (HLEG) on Sustainable Finance.