The EU Council has endorsed an objective for the EU economy to become climate-neutral by 2050, a move that investors welcomed as delivering what was needed from world leaders.
According to a Council document, the agreement came despite one member state, reportedly Poland, not being able to commit to implement the 2050 objective at this stage. The Council “will come back to this” in June next year, it said.
The 2050 target is a key element of the Green Deal presented by the European Commission on Wednesday; the Commission said it would within 100 days table a proposal to enshrine the 2050 goal in legislation.
Stephanie Pfeifer, chief executive officer of the Institutional Investors Group on Climate Change (IIGCC), said the news about the Council’s position meant “member states are now fully committed to the long-term transformation of the European economy at the highest political level, in line with a 1.5 degree future”.
“This is the outcome investors were looking for,” she added. “The policy certainty it provides will help unlock the additional flows of capital required to deliver a climate neutral future.”
Pfeifer called on other political leaders to follow suit, saying “this is what delivering the Paris Agreement looks like”.
The IIGCC and more than 40 of its members had earlier this month called on EU leaders to approve a net zero emissions target at the European Council.
Signatories included asset managers such as Aberdeen Standard Investments, Hermes Investment Management, and Legal and General Investment Management.
Ingrid Holmes, head of policy and advocacy at Hermes, welcomed the Council’s approval of the net-zero target but said “execution is imperative”.
“It will be interesting to see how each of the member states goes about addressing their commitments,” she added.
At BNP Paribas Asset Management, meanwhile, Helena Viñes Fiestas, global head of stewardship and policy, said: the Commission and EU member states were “putting their ambition where science is”.
“All EU countries have a duty to support carbon neutrality, and the measures needed to ensure that each economic sector transitions to net zero emissions by 2050,” she said. “That’s why approval of the target today is so important and such a significant step forward.”