Why EU’s New Climate Weapon Is Financial Fine Print: QuickTake

The fight against climate change involves more than towering wind turbines and glitzy electric sports cars. It’s also being fought in the fine print of financial regulations. The European Union is embedding environmental goals in standards for banks, money managers and insurers, in the hope of directing trillions of euros to fund a radical revision of the region’s economy. Skeptics warn that some of the changes could lead to spectacular losses instead. And a dispute over whether to include nuclear power among investments deemed suitably green shows just how fraught even some technical-seeming efforts can be.

The EU is committed to meeting the targets of the Paris Agreement, and with new leaders just taking their posts, its ambitions are higher than ever. In her first major policy announcement, European Commission President Ursula von der Leyen on Wednesday presented her plan to turn Europe into the world’s first climate-neutral continent. The sweeping economic transformation that’s needed to achieve this goal won’t be cheap, and regulators have acknowledged that it will require significant private investments.