Invest EU climate tracking and sustainability proofing Giorgio

Invest. EU: climate tracking and sustainability proofing Giorgio CHIARION CASONI 9 October 2019

Invest. EU: Overview Invest. EU Programme (2021 – 2027) Invest. EU Fund: • Single fund bringing together the many different EU-level financial instruments • EUR 38 bn EU budgetary guarantee (EU compartment) • Mobilise EUR 650 bn in additional investment across Europe • Four thematic policy windows 2

Risk-return logic goes green Green financing/ Investment: mitigated risks, transparent on impact Ursula von der Leyen: “I want Europe to strive for more by being the first climate-neutral continent. ” The financing gap 2020 -2027 - Climate & energy transition 185 – 260 bn p. a. - Social Infrastructure 100 -150 bn p. a. EU toolbox – Green investment & finance Risk-return logic: Green investments not always De-risking attractive Reorient capital flows towards sustainable investment (Taxonomy, green bonds standards, climaterelated disclosures) 4 windows - 30% overall climate target - 55% climate & environmental target for SIW* - sustainability proofing investments (Invest. EU) EUR 38 bn Guarantee EUR 650 bn mobilised investment *SIW – Sustainable Infrastructure window

MS Compartment EU compartment MS compartment § On a voluntary basis by MS § Consists of four policy windows § Established at the level of each policy window; 1 Member State = 1 sub-compartment § Budgetary guarantee size of EUR 38 bn, provisioned at 40% § Guarantee is not geographically ringfenced Invest. EU Fund § Based on a specific contribution agreement defining size, provisioning, contingent liability… § Contributions are geographically ring-fenced § Invest. EU rules apply

Climate tracking § Actions under Invest. EU to contribute at least [30%] to climate objectives. § [55%] of investment under SIW shall contribute to either climate or environment or both. § Invest. EU operations dedicated to climate objectives are expected to mobilise at least € 195 billion of public and private investment. § Commission to draft Climate and environmental tracking guidance in cooperation with potential implementing partners (work in progress). § Tracking methodology based on CPR Annex 1 as well as CEF II markers. Taxonomy to be used in an appropriate way.

Sustainability proofing • Sustainability is mainstreamed in the Invest. EU Programme • Bi-dimensional approach: Ø Ensure that Invest. EU support goes to investment projects that minimise detrimental impacts and maximise benefits on climate, environment and social dimension– sustainability proofing Ø Priority criteria on the positive agenda – climate & (environmental) tracking • Sustainability proofing specific requirements: recital (12) and Art. 7 (3) of the Invest. EU Regulation • Guidance to be developed in cooperation with potential Implementing Partners: Ø Drafting of the guidance: June 2019 – June 2020.

Sustainability proofing • Applicability: all four windows Ø Infrastructure projects Ø Non-infrastructure projects • Screening Ø [In case the impact is deemed to be significant for only one or two of the dimensions, no proofing shall apply for the remaining one/s] Ø Criteria for screening: starting from Annex III of the EIA Directive, to be further developed • Threshold – “Projects below a certain size defined in the guidance shall be excluded from proofing” (Art. 7(3)) • Sustainability proofing Ø No proofing needed: justification to be presented to the Investment Committee Ø Performing the in-depth proofing based on the screening results

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