Sustainable Finance Strategy plan lists 26 individual measures and is due to be adopted by the cabinet on Wednesday with a view to mobilizing investment for climate protection projects. The federal government wants to develop Germany into a leading location for sustainable finance. The plan aims to support the European Union becoming carbon neutral by 2050 – a target the European Commission estimates will require €350 billion to be invested annually. The plan also responds to investors demanding more companies complying with environmental, social and governance (ESG) criteria. To assist investors, the German plan envisages a sustainability “traffic light” system that makes it easier to identify green investment opportunities. Berlin wants to coordinate the traffic light plan with the EU if possible, but if it cannot move ahead quickly with the bloc it will start with Germany’s Federal Environment Agency.
The government also plans to increase guarantees and export credit assistance for green projects, and to reallocate €9 billion in equities it holds in pension and welfare funds into green investments. With the Greens now topping most opinion polls, Chancellor Angela Merkel’s conservatives and their Social Democratic coalition partners are eager to tout their green credentials. The government envisages green bond issuance this year similar to 2020, when it launched its first two green bonds with a combined volume of €11.5 billion. A 30-year green bond is planned for May, with a 10-year issue to follow in the second half of the year.