The Strategist

ESG development in Europe expected to stall after state support stops

08/01/2022 - 15:22

The next step in Europe's effort to establish a global standard for ESG investing has been put off indefinitely due to politicians' reluctance to devote resources to it, reports Bloomberg.

According to Bloomberg, which cited people familiar with the situation, the growth of the social criterion in the ESG strategy in Europe will be put off indefinitely. Environmental sustainability, strong social responsibility, and excellent corporate governance are all part of the ESG principles.

The multi-year process of seeking money for ventures that adhere to environmental standards was meant to continue with the social taxonomy (section S in the ESG strategy). Initially planned to be debated in 2024, the move has now been put off indefinitely, according to sources.

The Ukraine events add to the issue. Global wars have resulted in an energy crisis, and the European government believes it is essential to shield energy security. As a result, the coal industry has recovered despite increased greenhouse gas emissions.

The European Commission initially assured investors that it would produce a report on the anticipated work on ESG by the end of 2021, but this procedure has not been finished.