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7 May 2021
Liz Pfeuti
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7 May, 2021
Businesses�and investors�in Germany are facing a fresh wave of environmental regulation after the�government unveiled�a�new sustainable investment strategy just weeks after the EU announced its own far-reaching standards.
The German Sustainable Finance Strategy has 26 separate measures to boost green investment, including plans for the country�s own �traffic light� system to help investors identify environmentally friendly investments, and new laws requiring non-financial disclosures from companies.
Germany�s own�national investment rules come�just three months after�the�European Union�introduced its�Sustainable Finance Disclosure�Regulations (SFDR) along with�the EU�taxonomy�for classifying sustainable investments.�The German government said�it would seek to align its traffic light system with the rest of the EU,�but that�if progress on�that alignment was slow it would press ahead with the�national�scheme�through its Federal Environmental Agency.�
Other measures included in the strategy are plans to increase export�credit�guarantees for green projects�and�a transfer of��9bn�(�7.8bn)�worth of�equities�held in state pension and welfare funds into sustainable investments.�
The German government said the strategy was intended to help the wider EU hit its environmental targets, which include cutting carbon emissions by 55% by 2030 and becoming carbon neutral by 2050.
Germany�s Sustainable Finance Committee, which advises the government and whose work underpins the new strategy, has estimated that �1trn will be required in targeted investment across Europe to meet those targets. As a leading financial centre, Germany�s investment markets would have to play a significant role in such a scale of investment.
The announcement from the German government comes as the country moves towards national elections in September, in which environmental issues appear to be playing a significant role.
Chancellor Angela Merkel�s Christian Democratic Union party and its coalition partner the Social Democratic Party are facing a strong challenge from the Green Party, which is currently leading most polls.