On Tuesday 7 January 2025, the Financial Times that the European Investment Bank fears a “reputational disaster” due to forthcoming EU reporting rules that could undermine its climate-friendly credentials. According to leaked internal correspondence, the new rules would require the EIB to report a Green Asset Ratio (GAR)--an EU metric measuring the proportion of assets deemed climate-friendly--of “around 1 per cent.” This contrasts starkly with its current EIB self-defined Climate Action Ratio, which stands “above 50 per cent.”
When approached by Paperjam regarding the so-called “internal memo,” an EIB spokesperson stated, “We do not comment on leaks.”
Sustainability reporting
Addressing the broader context of sustainability reporting, the EIB provided further clarifications. “There is broad consensus on the need to recalibrate existing rules and standards in order to correct existing gaps, to properly reflect and incentivise green investment, and to reduce the reporting burden for companies, especially SMEs,” the spokesperson stated. They added that the EIB, together with other public financial institutions, is actively engaging with the European Commission to help refine sustainability reporting rules.
Collective call
The EIB’s concerns align with those of Europe’s five largest national development banks. In December 2024, the CEOs of these institutions, including EIB president Nadia Calviño, sent a letter together to the European Commission advocating for a more practical approach to green finance reporting.
The letter expressed strong support for the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards. However, it highlighted the need for a transitional phase and specific adjustments to the framework. “Despite the undeniable benefits of such an advanced reporting system,” the letter stated, “we advocate for changes in certain parts of the regulatory framework.” It noted concerns about excessive data collection requirements and the GAR’s calculation methodology, which “penalises a whole range of otherwise green investments.”
The CEOs stressed that addressing these issues would enhance sustainability reporting, reduce the burden on companies and financial institutions and ultimately improve acceptance across the EU economy.
Green Asset Ratio
The EIB spokesperson outlined specific issues with the GAR, noting that its calculation “excludes a large share of green investments by public financial institutions, such as financing agreements with sovereigns, lending to SMEs and operations outside the EU.” Examples of such projects include:
- Debt-for-climate resilience in Barbados: A groundbreaking guarantee supporting a debt-for-climate swap, enabling investments in water reclamation to reduce marine and groundwater pollution, which is excluded from the GAR.
- Energy efficiency and environmental upgrades in Bulgaria: A €250m loan to co-finance energy efficiency, wastewater treatment and soil protection initiatives, aligned with EU climate goals but not counted under the GAR due to its sovereign financing structure.
- Renewable energy financing in France: A €250m commitment supporting SME and mid-cap renewable energy projects such as solar photovoltaics and biogas production, excluded because SME financing cannot be included.
Green finance
The EIB emphasised its leadership in green finance, noting that over 50% of its annual investments are committed to climate action and environmental sustainability. “Green finance is and will remain a core strategic priority for the EIB Group,” said the spokesperson. The bank also highlighted its high transparency standards, with project-level data and aggregated totals audited externally and published annually in the EIB Group Sustainability Report.
Regarding transparency and public engagement, the EIB addressed concerns raised by activist groups like ClientEarth, stating that it fully complies with the Aarhus Regulation and the European Court of Justice ruling. “The EIB’s processing of internal review requests represents an additional channel in our constant effort to engage with civil society and in the shaping of our policies and activities as the Climate Bank,” the spokesperson said.
Headquartered in Luxembourg, the EIB plays a central role in financing projects that support EU policy objectives.