Keynote speech by Commissioner McGuinness at the EU Sustainable Investment Summit 2024

EU Sustainable Investment Summit 2024

A very good afternoon, delighted to be here.

The country I know best, many of you may have heard – we've experienced near gale-force winds, but two storms in quick succession in the last few days.

Some may have seen the aircrafts that couldn't take off or even more frighteningly, the aircrafts that couldn't actually land and had to revert to the home base.

And I tell you this story because this is not normal from the green isle of Ireland.

But we are seeing more and more storms. We are seeing more and more extreme patterns of weather that are impacting in the way I've just described.

As I speak, many households and businesses have no power and will remain without power for some days.

So the impacts of climate on citizens, on businesses, is now very real and people are more and more concerned about it.

So it gives a huge urgency to our conversations today.

And I'm really happy to speak before a very important panel which will follow on innovation as a driver of the climate transition.

Because I think we all know in this room that without innovation and new technologies or breakthrough technologies, we will not achieve our climate goals.

But I want to take a quick look as to what 2050 needs to bring to us and how things will be in 2050.

And then a word too about how we fund it, about the money part of the equation.

Now a big admission here: I'm very unlikely to be around to see how things will turn out in 2050, when we should meet our climate goals.

I'm not going to ask those in the audience who feel they will be with me on that journey, wherever that takes us!

But maybe it makes it more important for those of us who will not be around to do the best and the most that we can while we are.

Because we're talking about dealing with issues for the next generation of children that are not born yet, to make the world a much better, safer place.

And also a more sustainable place, a better place to live, work and play.

So by 2050, our energy should be based on renewables using advanced technology – hydropower, bioenergy, wind and solar.

A consistent supply of energy because that will be down to storage, energy storage and hi-tech batteries.

Smart grids – digital technologies to help coordinate supply and demand.

Our homes will be more efficient, more comfortable.

We'll have retrofitting in place and new builds will be about using as much recycled insulation material as possible, with solar panels on the roof just part and parcel of what should be.

And also rain harvesting will be part of the equation as well, because water will be a resource that we will need to cherish.

Travel will be very different.

Yes, we will still walk and hopefully take a bike.

But I come from a generation where bikes were regarded as things that you had when you were poor enough to have a bike.

Now you have to be rich enough, in some cases, to own a bike of a certain category.

So really, some things never change. And I always remember my grandmother and indeed my mother saying, waste not, want not.

And in any language, that's exactly what I think sums up sustainability targets and agenda.

We use more fancy language – but really, that is what we're about for the future.

So we will have electric cars, we hopefully will have lost this fear of range, because there will be all of the infrastructure to charge.

And there will be more innovations around lightweight and long-lasting batteries.

We might even want to share cars more that we do today – we're very possessive of our own car. Maybe that will change – it will need to change.

But electricity will really be at the forefront of all our transport.

Our rail networks will be expanded and be more efficient.

And then when it comes to transportation of goods, which I think is a huge topic around, how will we move to these electric fleets, electric trucks that will be necessary.

And how will those aircrafts that I mentioned that couldn't land or take off, and ships, how will they be powered?

Certainly low emissions fuels will have to be just the norm, and hydrogen-based fuels.

So the future is based on new technologies, developing existing ones to be much more efficient.

And we need a world that is more circular, where we don't just dump but we reuse.

So those things we're talking to our children about in schools.

When I was an MEP and speaking to little children, they were much more tuned into reducing, reusing and recycling.

And I'm thinking back to the 1960s, and indeed that era.

We're talking now about the right to repair.

Back then it was just necessary to repair.

So again some things never change but the focus is different.

We do need to reduce waste.

And I think all of us in households and you know we're all part of households, increasingly wonder, how is plastic growing rather than decreasing when it comes to the end of the week and we recycle our waste.

But the vision for 2050 is a very positive one.

And therefore it should drive us in all our efforts to get there.

Frankly it is much easier to say all of these things than to see them done. But we don't have a choice.

Technology and innovation will be absolutely crucial to that transition.

To get that technology and innovation in place, we need investments.

We need money.

And public investment will be important.

But we do absolutely need to understand and really push the role of private finance and private investment in this digital and green transition.

It can come in the form of bank loans.

But it also has to come from our capital markets here in Europe.

If we want investment in clean tech and green tech, we do need thriving capital markets.

Some of you in the room will have heard me repeat many times and I'll do it again today, that we do need to complete the Capital Markets Union.

Because this is about allowing businesses have access to more sources of funding as they start out on a journey of innovation and developing technologies.

It's also about making sure that startups born in Europe can scale up in Europe.

And also about funding the creativity and risk-taking that's needed for innovation.

To help drive direct private investment towards our climate targets, and to do that, we have sustainable finance.

This is to allow investors to know where and how to invest if they have a sustainability agenda.

So it's about targeting money and giving a direction of travel.

Including in technologies needed for the green transition.

So that companies know what they need to do if they want to transition towards sustainability.

Or they can easily show investors what they're already doing to innovate in the transition – and get private financing to support that work.

And this is something the EU has taken an innovative approach to when it comes to regulation.

So just briefly, in the last few years, we've built a strong rulebook for sustainable finance.

You are all I hope aware of the EU Taxonomy – which is essentially a glossary for sustainable economic activities.

And this helps investors know more about their investments, and helps companies show their environmental and sustainability performance.

And innovative technologies are highlighted in the Taxonomy.

For example, manufacturing low-carbon technologies, or manufacturing batteries.

And the Taxonomy also includes activities for research, development and innovation: to support companies bringing innovative green solutions to the market.

We've tasked the Platform on Sustainable Finance – our expert group – to develop Taxonomy criteria for mining and refining of metals and minerals.

Because we need raw materials if we want to scale up technologies and deliver on decarbonisation.

Not to mention strengthening Europe's capacity in critical raw materials.

Now beyond the Taxonomy, we've also put in place comprehensive disclosures – helping companies show what they ' re doing to tackle climate change.

And we have labels and tools like green bond standards and climate benchmarks.

Companies across Europe are driving the transition towards innovation – many are start-ups, and many are SMEs.

Very often specialising in very specific technologies and applications.

And so they are often the companies developing the unique and groundbreaking solutions that we need.

And that's why we're considering how to make sure that the EU's sustainable finance rules can support their contribution to the European Green Deal.

Like options for more targeted guidance and proportional rules for SMEs, to help their access to sustainable finance.

For example, this could mean supporting SMEs in responding to requests for sustainability information by banks when they apply for loans – especially if those are green loans, intended to finance environmentally-friendly projects.

Green loans could play a much bigger role in financing innovation in future.

So we should see what the EU can do to boost the uptake of green loans.

Developing the concept of green loans and setting standards for them at EU level is a promising route.

And the Commission recently received advice from the European Banking Authority on green loans, and we're looking at that advice very closely.

Innovation will be key to move the economy to towards sustainability.

And to help spark that innovation and that move, we can use ‘transition finance' – and one of the things I think we need to focus on much more, rather than focus on green and brown as we sometimes do, is to talk more about the transition and indeed talk more about transition finance.

Helping those companies that want to become greener and more sustainable.

And here we have provided guidance to the financial sector on what they can do to support companies facing the most significant challenges on their transition pathways.

This includes helping SMEs in their efforts to transition to more sustainable practices.

And facilitating their access to finance so that they can innovate and come up with green solutions.

So overall, we have solid foundations in place for sustainable finance.

We have the potential there for private finance to be channelled towards innovative solutions for the green transition.

The next step is for investors and companies to use these tools.

And here I have to say the first signals from the market are good.

So for example, the Taxonomy is already being widely used.

The first year of Taxonomy reporting shows companies getting sizeable revenues from Taxonomy-aligned activities.

And many companies are presenting investment plans showing how they intend to align more with the Taxonomy over time.

The utilities sector – companies that supply electricity, water, gas and so on – disclosed the highest Taxonomy-aligned figures.

And that sector as you know is hugely important if we ' re going to reach net-zero.

And this shows that the sector is investing in innovative solutions to reach our climate goals.

So we all know where we need to be by 2050.

It is a challenge, but it's a challenge that we can face together, that we have to face together, and we've done a lot of work on this already.

I believe Europe can innovate to meet these challenges, and it can develop the green tech and clean tech that we need.

But money matters in all walks of life, and here money is crucial.

And that's why a core of our work around the Green Deal and my work in the financial area is around sustainable finance tools to make sure that companies know what it means to invest or to be on the path towards sustainability, and that investors know where their money is going.

And I do think we're at a very critical juncture in relation to sustainable finance and the path to net zero.

Where we know that we need to have more legislation. We do need to have transparency, more disclosures.

But we've been very conscious of being proportionate so that we are effective.

And now we would ask industry, both the financial industry and all of the sectors around the innovation you're about to hear about, to use the tools.

They're in place and we're ready to support your work.

Thank you.