The European Commission (EC) must tread very carefully while framing its Green Deal sustainability criteria or risk quashing the financial sector's support for Europe's defence sector, warn top officials from industry and the European Union's (EU's) own defence policy and financial quarters.
Their worries focus on the EU's 18-month-old Taxonomy Directive (EU 2020/852) on sustainable investments. The directive lays down four overarching conditions that economic activities must meet to qualify as environmentally sustainable, the details of which the Commission will define in the coming months.
“This taxonomy will grow in importance and if we don't intervene, it will be very negative for the defence industry in the future,” warned Kris Peeters, vice-president for dual-use lending at the European Investment Bank (EIB), the EU's infrastructure financing arm. “There is a danger that if the taxonomy does not go in the right direction, then banks will impose a higher cost of financing on these sectors.”
Peeters and other speakers addressed their remarks to an 18 November conference in Brussels, hosted by the European Business Summit.
Fellow panelist Jan Pie, ASD Europe's secretary general, said his organisation's member companies are already feeling the impact of intense social pressure on banks and stock markets to go green, to the detriment of defence and military investments.
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