On 18 January, the European Scientific Advisory Board on Climate Change (ESABCC) published its latest report ‘Towards EU climate neutrality: progress, policy gaps and opportunities’, which calls on the implementation of additional measures to ensure that the EU meets its 90% emissions reduction target, which the Commission envisages for 2040 ( Euractiv, Politico). The report contains several references to the sustainable finance agenda, and makes specific policy recommendations to improve the EU Taxonomy, based on identified gaps. The ESABCC notes that not all Taxonomy thresholds for economic activities are aligned with climate neutrality, and calls on the Commission to regularly update the criteria, especially to avoid ambiguity regarding fossil fuel phase-out. The report specifically warns that investments in natural gas should be considered non-sustainable to avoid creating lock-ins. It also points out that the non-legislative acts establishing the taxonomy criteria for sustainable investment have not been accompanied by appropriate impact assessments, including public consultation and climate neutrality checks, and should be further substantiated.

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