Beyond the Securities Act, the European Commission is the driving force behind standardisation on financial instruments. One way to ensure that markets continue to work effectively is by mandating EU green taxonomy mandatory reporting on the sustainability of activities that impact a project’s inherent environmental impact.
The scent of grainy driedweeds hangs in the meadows of Belgium, reminding me of the 23rd Independence Day celebration. Today the celebration is on a different tone, as the European Commission is going to propose new rules for EU green taxonomy disclosure of the environmental impact of investments, most notably on corporate disclosure from trading stocks and shares.
It will be helpful to stay up to date on the EU green taxonomy debate, and what’s in it for the general public, to gain some perspective as to the potential impact on capital markets and how capital can be best deployed toward formulating a projects’ sustainability.
Set Aside Millions to Create a Security for the Planet
Much is riding on adopting the required disclosure standard, and if it is adopted we will be in the process of reaping the benefits.
The Securities Commission has moved towards greater registration of publicly traded companies, and will be providing financial incentives to fund public partnerships of projects that meet their stringent EU green taxonomy criteria.
Commission Chairman Robert Cheryl has indicated a strong preference for expressing the environmental benefit of projects by financial means, stating that the implementation of the rules could lead to a greater participation in sustainable development projects.
Incentives will be paid for projects by individuals, companies and non-profit associations in order to motivate projects to succeed and ensure the continued progress toward environmental sustainability.
Currently, the United States determines benefits of a project to be determined by their environmental impact and/or social contribution, but the commission is proposing to consider broader criteria. Those EU green taxonomy criteria would include: economic benefit, national priorities and conditions under which the project draws upon public funds.
The Commission states that the EU green taxonomy rule-making process should include an evaluation of social or environmental benefits.
The new rule-making process is to take approximately two years and the new rules will be published publicly much sooner and will be significantly more pervasive than those proposed in 2006.
The SEC has stated that the ultimate responsibility for the millions of U.S. projects will shift to the project sponsor, who would link together a portfolio of EU green taxonomy resources. In addition, the sponsor would be responsible for making an undertaking to seek formal registration with the Commission under the DIS Lag hiking advocate, so that EPC can adopt an opportunity and reasonably reduce the risk that the project will receive disinterested funding.
The Federal Government’s investment will move into the realm of stakeholder power to determine which projects to fund.
If funds are invested in projects with a payoff for capital, the funds will be invested in project possibilities that can potentially be of an even greater economical value.
Major Project Funded By a Public Space and Offshore Banks.
The first project that will benefit is the Deepwater Horizon Horizon Oil Spill. The amount of funds for cleaning up the Gulf of Mexico is less than $10 billion so the total amount spent at this site will amount to over $700 million. This amount is backed by a loan from a government agency, a combination of which is typically five to one.
The lesson learned is clear. If you’re starting to reconsider your dream about funding projects, you’ll find interest in these types of EU green taxonomy projects and even the love of a project can be traded for a deal of comprehensive funding. This is, of course, if the project is Somehow socially worthy.
Voluntary disclosure of projects is required by the SEC to each mutual fund or socially unacceptable financial transactions.
Corporate housing projects such as hurricane rebuilding and vacation home development can count as socially unjust projects to fund.
The compensation plans for project managers and executives is an additional layer of disclosure which makes for greater monitoring and control by regulators.
The commission also wants to ensure that social benefits are considered.