Welcome to the European Parliamentary Research Service podcasts.

Today we'll be talking about green finance, about sustainable finance,

but also about greening finance, three interlinked concepts,

and how the EU is promoting them and the transition to a more sustainable economy.

Keep listening.

The world seems to finally have realised that the move towards a more sustainable economy is not a luxury, but an urgent necessity. Or so we would like to believe. But transforming the EU economy

to make it more sustainable requires enormous investments,

and given that the public sector alone cannot possibly foot the bill,

solutions have been sought to bring the private sector on board.

Now, what kind of solutions are we talking about?

Climate finance provides funds to deal with the consequences of climate change

and mitigate its negative effects.

Green finance has a broader scope as it also covers other environmental goals such as protecting biodiversity,

while sustainable finance also covers social and governance factors such as working conditions and health and safety issues.

Now, the concept of green finance is divided into two elements, greening finance on the one hand and green financing on the other. The first is about introducing new tools and procedures

to allow the financial system to take better account of climate and environmental considerations

in the management of financial risks.

The second, green financing, is about attracting more private capital to finance the green

transition through instruments such as green and sustainability loans, green bonds, social bonds

to finance social projects, even blue bonds to finance marine projects.

As you can see, there's no shortage of options. So what is the EU doing in this field? Keep listening.

To become climate neutral by 2050, Europe will need to mobilize up to 290 billion of additional investments per year from energy efficiency to cleaner transport.

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