Existing regulations
In 2015, the international community (nearly 190 countries, including the European Union and its member states) concluded the Paris Agreement, the United Nations Framework Convention on Climate Change.
It is the first universal and legally binding global agreement on climate issues. It sets out a global action plan to protect us from the threat of far-reaching climate change by limiting global warming to less than 2°C and aiming to keep it at 1.5°C. Signatory governments agreed that emissions should be rapidly reduced in line with the latest scientific information available to achieve a balance between emissions and absorption of greenhouse gases in the second half of the 21st century. Of importance to the banking sector is the fact that the Paris Agreement commits parties to ensure that financial flows are consistent with the climate goals of the agreement, i.e. to eliminate investments in climate-damaging projects. The international effort to combat climate change is led by the European Union, which in December 2020 presented an updated and increased nationally determined contribution to reduce emissions.
As part of its climate and energy policy, the European Union has committed to reduce net greenhouse gas emissions in its territory by at least 55% by 2030 compared to 1990 levels.
The declaration is a binding target for all member states.
A document that has influenced our way of managing emissions is the 2018 European Parliament report, which proposes to add the topic of greenhouse gases (GHG) emissions to the hitherto accepted scope of information to be included in the activity report, in the form of presenting emissions in Scopes 1, 2, 3 and the results of implemented actions in relation to the climate objectives of the European Union.
The abovementioned regulations, as well as many others, including the Climate Pact, are the elements of the European Union strategy called the European Green Deal. The plan aims to transform the European Union into a fair, healthy, sustainable and prosperous society. It also aims to help fix the way we treat nature. It puts in place the policies and laws needed to make systemic change a reality. The solutions outlined in the Green Deal will only succeed if everyone is actively involved and makes a tangible contribution. The overarching goal is to achieve a profound greening of the European Union’s economy from the third largest source of greenhouse gas emissions in the world to the first climate-neutral area in three decades.*
*Based on: European Climate Pact. Enhancing the role of citizens in shaping a greener Europe, Brussels, press release, 9 December 2020, https://ec.europa.eu (Accessed on 30 April, 2021)
