‘Green taxonomy does not apply to defense financing’

Brussels – The Green Deal does not apply to defence, said Mairead McGuinness, Commissioner for Markets and Financial Services, who clarifies how security should not be compromised in terms of financing and the granting of credit lines, despite a European policy that pays attention to sustainable investments and that taxonomy that specifically favors activities with a low carbon footprint regulates. “The European Union’s sustainable financial framework does not impose any restrictions on the financing of the defense sector”, the Commissioner explained in response to a question from Tomáš Zdechovský (EPP).

An emphasis that has become indispensable at a time when there is a need in the European Union to revive an industrial sector that is becoming increasingly strategic and that is facing many problems, as evidenced by the inability to supply Ukraine with one million rounds of ammunition . If we then add sustainability goals, it becomes even more complicated to accelerate the sector’s production.

There is a perception problem, the EPP Member of the European Parliament emphasizes in his question. The defense industry “is seen as ‘dirty’ or unsustainable and most banks do not provide the necessary investments,” which is why the EU executive should explain this, suggesting taxonomy changes and a review of sustainability indices.

McGuinness offers an answer that lends itself to at least two readings: some may find it ‘convenient’, someone else may interpret it in the sense of flexibility. “The The EU taxonomy focuses on activities that have the greatest potential to make a substantial contribution to one or more of the EU’s environmental objectives. “The mere fact that the fact that a company does not engage in taxonomy-aligned activities does not mean that conclusions can be drawn about the company’s environmental performance.” Failure to meet the sustainability criteria does not automatically mean that the company is not sustainable.

A message to banks and lenders: as the taxonomy will not be changed, as McGuinness makes no mention of it, loans must be provided to put Europe on a safe footing. With the understanding that “as in any sector, companies involved in defence-related activities can claim adjustment of the taxonomy for eligible horizontal investments,” she adds.

In any case, Brussels is not standing still. The problem of ‘greening’ defense is known and real, with “the The Commission is in regular contact with stakeholders from the defense industry and the financial sector on access to finance.”

English version by Withub translation service