[Re: Bye bye to gas? No, it’s too soon, January 17]
Last week’s letter by Richard Lum suggested the Institutional Investors Group on Climate Change’s open letter to EU Member State representatives calling for gas to be excluded from the EU Taxonomy was “well-intentioned” but “very one-dimensional” and that investors should not be presented with “binary choices”.
For us, the question is binary. Should gas be labelled green or not? While we welcome all views and stand ready to engage with others, our view is that gas cannot honestly be classified as green. Critically, however, this is not to say that gas does not have a role as a short-term bridge as part of a period of transition; it does. It’s specific role in the EU and what this means for investors should be looked at in more detail in the forthcoming negotiations on the Gas Package.
Investors need to be confident that the taxonomy provides an objective framework for identifying economic activities that align with the EU’s climate goals and the ultimate objective of net zero by 2050. The inclusion of gas creates a risk that investors will continue to channel long-term capital into activities which are incompatible with 1.5°C, diverting much-needed investment away from the activities and projects which are essential for reaching net zero.
The EU Taxonomy is meant to be the cornerstone of the EU’s sustainable finance agenda and will set the tone for the investment community globally. It is paramount that it sends the right message and that starts with being clear about what is green.