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2.3. GREENING INVESTMENTS

2.3.1. Background to greening investments

The Global Gateway is a key European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world. It has become a cornerstone of EU cooperation that is largely implemented through support to investments in the form of blended finance and budgetary guarantees. The Global Gateway aims to invest in developing infrastructures that are clean, climate resilient and aligned with pathways towards net zero emissions; it also promotes the implementation of the G20 Principles for Quality Infrastructure Investments .

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The EU contribution to an investment should result in an additionality, which can be environmental, and which is expected to go beyond regulatory obligations^[24]. The preparation of Environmental Impact Assessments cannot be considered an additionality as it is a legal requirement in most cases.  

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Recent European policies and legislation on sustainable finance^[26] translate international commitments^[27] into a framework for European FIs to integrate the sustainability objectives and upgrade their environmental policies and systems. Most of them have pledged for net zero strategies, and the CBD COP15 Decision on Resource Mobilisation calls for alignment of their portfolios with goals and targets of the Global Biodiversity Framework. Nevertheless, integrating recent pledges and regulation in investment processes and cascading implementation of sustainability strategies down to the projects on the ground is complex. Additionally, not all EU partner FIs fall under the European regulations.

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In addition to promoting sustainable finance, environment and climate change must be integrated in all EU supported investments, irrespective of the form of support

Click here for ideas on how the use of blending and guarantees can be geared to support environmental and climate objectives.

The entry points for the EU to integrate environment and climate change in blended finance and guarantees are very similar, although the processes are different. In all cases it is essential that environment and climate change concerns are addressed upstream in the process, as early as possible, and that these remain a constant element throughout the whole cycle.

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References

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[24] [24]

^[24] The Blending Guidelines provides clarifications on additionality of EU support in blending operations. 

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[25] [25]

^[25] The lead financial institution is the pillar-assessed IFI which carries the project and gets into contractual arrangements with the EU. Other IFIs may be involved as co-investors.

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[26] [26]

^[26] The European Sustainable Finance Strategy (ESFS), including the EU Taxonomy for sustainable activities, the Sustainable Finance Disclosures Regulation (SFDR), and the upcoming Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).

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[27] [27]

^[27] Including the 2030 Agenda for Sustainable Development (2015), Agenda 2063, the Addis Ababa Action Agenda (2015), the Paris Agreement on Climate Change (2015), the Sendai Framework for Disaster Risk Reduction (2015-2030), and the UN Security Council Resolution 2282 (2016) on sustaining peace and the Global Biodiversity Framework (2021).

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