The Court of Justice of the European Union has dismissed a case brought by Austria over the European Commission’s decision to label fossil gas-fired power and nuclear power as “green” under the EU Taxonomy. The case was filed in 2022, and a separate case was filed in 2023 by NGOs ClientEarth, WWF EU, Transport and Environment and BUND challenging the EU executive for the same reasons. The Court yesterday ruled that by including nuclear energy and fossil gas in the “sustainable investment scheme”, the Commission did not exceed the powers which the EU legislature “properly conferred on it”.
It added that the Commission was “entitled” to take the view that nuclear energy generation has near to zero greenhouse gas emissions and that there are currently no technologically and economically feasible low-carbon alternatives at a sufficient scale, such as renewable energy sources, to cover energy demand in a “continuous and reliable manner”. The Court said the Commission was “under no obligation” to require a level of protection going beyond the existing regulatory framework. “The arguments put forward by Austria relating to the negative effects of droughts and climate hazards on nuclear energy are too speculative to be accepted,” it said.
Finally, the Court said that economic activities in the nuclear energy and fossil gas sectors can “under certain conditions, contribute substantially to climate change mitigation and adaptation”. An appeal may be brought forward against the Court’s ruling within two months and 10 days of the decision.
The US Financial Stability Oversight Council has voted to rescind the charters of its Climate-related Financial Risk Committee and Climate-related Financial Risk Advisory Committee. The charters were revoked at a Wednesday meeting of the Council, which combines federal and state regulators and the secretary of the treasury to assess, monitor and mitigate risks to US financial stability.
Jessye Waxman, an advisor to the Sierra Club’s sustainable finance campaign, said that “climate risk is financial risk—and FSOC itself has already recognized it as a systemic threat to our economy and markets. Choosing to ignore these risks isn’t just petty political posturing; it makes the financial system more fragile by weakening regulators’ ability to monitor and respond to cross-cutting threats that endanger Americans’ financial security.”
New Zealand’s Financial Markets Authority (FMA) is considering exempting companies operating in certain markets outside of New Zealand from its climate reporting regime. The FMA has said the decision to propose this has been made due to “multiple, often overlapping” reporting mandatory climate disclosure obligations emerging across various jurisdictions, such as Australia, which this year introduced mandatory climate reporting, in line with the International Sustainability Standards Board (ISSB).
This would apply to companies that operate in a jurisdiction which requires them to follow similar disclosure obligations, provided that these are broadly in line with New Zealand’s framework and of a high quality. If granted, it would allow these companies to log their local disclosures on New Zealand’s climate-related disclosures register. The exemption would be subject to conditions. The regulator is consulting on this until 24 October. It comes as New Zealand’s External Reporting Board (XRB) this month proposed to delay certain reporting requirements under its climate and assurance standards.
The Dutch central bank has said that it will increasingly focus on regulatory compliance in its supervision of financial and non-financial risks related to climate change and environmental degradation, after placing the emphasis on raising awareness for the past several years. “Supervision will follow a risk-based approach, tailored to the institution’s size, complexity and the materiality of the risks,” DNB said.
The comments came as the central bank updated its guide advising financial institutions on managing climate and nature-related risks. The guide includes new practical examples, such as expanded statutory frameworks, new insights into nature-related and legal sustainability risks, and updated good practices, including examples of nature risk management and the role of climate action plans.
DNB said that financial actors are required to manage “all material risks, including ESG risks such as climate and nature-related risks”. It added that while many have taken steps to incorporate these factors into their risk frameworks, “previous assessments show that integration is not yet consistent across the sector”. The central bank is also conducting risk-based review of climate and nature-related risk analyses at pension funds and insurers.
The Australian Retirement Trust has committed close to A$1 billion ($660 million; €565 million) to Macquarie’s Green Energy and Climate Opportunities Fund as part of its A$2 billion impact allocation target. The fund, existing clients of which include other Australian and UK pension funds, will initially target investment opportunities across solar, onshore and offshore wind, as well as batteries in OECD countries including Australia.
Industry body Impact Europe and a large group of impact and venture investors have published a call for the EU to create a distinct impact category as part of reforms to its Sustainable Finance Disclosure Regulation. The bloc is currently mulling a category system for funds under the rules, and the group said that “a distinct impact category would support Europe’s broader ambition to foster sustainable innovation”.
The Nordic Investment Bank (NIB) has launched a sustainability-linked loan bond framework, enabling it to make use of a novel instrument designed to finance a portfolio of loans tied to sustainability targets. The framework has received a second party opinion from S&P Global Ratings confirming its alignment with ICMA guidelines on the topic. NIB, a multilateral development bank serving the Nordic and Baltic regions, currently has €1.23 billion in outstanding sustainability-linked loans.