Taxonomy: Churches are afraid of EU rules on sustainable development – the economy

The fierce dispute over the EU’s green taxonomy is to be settled as representatives of the churches and the social economy in Germany are already clamoring for an explosive expansion: a social taxonomy. Green taxonomy is a classification system for which economic activity is climate and environmentally friendly. It must be green laundry prevent, and therefore a bad habit, that companies or mutual funds sell themselves as greener than they really are. The hassles like now with the DWS fund should be avoided. The European Commission hopes to increase confidence in sustainable financial products and attract more investor money.

However, the office met with great indignation when it said in February that investments in nuclear and gas plants should also be considered sustainable under certain circumstances. Therefore, shares in operating companies could be found in eco-funds from 2023. Next Tuesday, the European Parliament’s committees will vote on whether they want to block this taxonomic decision – the final vote in plenary will take place in three weeks.

These quarrels do not prevent the Bank für Kirche und Diakonie from quickly calling for a social taxonomy: the Commission should also identify which economic activities are of a social nature, i.e. increase the well-being of people and communities, by analogy with the green catalog of criteria.

The bank based in Dortmund donates money to Protestant social institutions and aid organizations such as Diakonie. The institute, with the support of church groups, sent an open letter to the President of the Commission, Ursula von der Leyen.

It concludes that without a social taxonomy there is a risk of “potentially more difficult financing conditions for the social economy”. Concern: If the EU clearly regulates what is green but does not regulate what is social, investors who wish to invest sustainably may invest their money in green funds and bonds rather than in funds that finance social activities. “We see great danger there,” said CEO Ekkehard Thiesler Suddeutsche Zeitung. “Climate protection is very, very important to us, but the social side should not be forgotten. “

So far, the Commission has hesitated

Thiesler also fears that state-owned development banks such as KfW would also follow the EU taxonomy and therefore reallocate funding from social to green: “Then all development loans will go to climate protection because the taxonomy judges it as sustainable.” He is already observing such changes, “and we fear it will be all the more so if there is no social taxonomy.”

In fact, three and a half months ago, an EU expert group presented an 84-page report on what a social taxonomy to complement green could look like. Accordingly, the classification system aims to assess how companies contribute to the achievement of three goals: good working conditions for their employees and suppliers, the well-being of customers and users of products, and an inclusive society.

In addition, some goods should be defined as socially harmful, such as cluster bombs. Their producers could not be considered socially sustainable and emitted social ties, even if they treated their employees like royalty and were the main sponsor of the local wheelchair tennis club.

How are arms factories sustainable?

However, so far the European Commission has shown no real interest in initiating the introduction of a social taxonomy. Apparently, the government is satisfied with the murderous dispute over nuclear and gas plants when it comes to green regulation. It seems that Brussels would then like to give up discussing what is socially sustainable.

Thiesler’s bank manager believes the fear of escalating debates is exaggerated. There are enough international agreements on social norms and rights that the EU can use as the basis of its taxonomy, says: “There is agreement in 95 percent of the cases, but there may be disagreement in five percent.”

The armaments industry’s role would probably be in the five percent. As a precautionary measure, the German trade association BDSV is demanding that the social taxonomy classifies its members as sustainable. After all, the products served peace and security. However, for many investors the idea of ​​social bonds financing defense factories was strange. Bank boss Thiesler would also be against giving the industry the coveted sustainability logo: “You don’t know where your manufactured weapons will be used – for defense or for attack?”

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