Public money should be geared towards “only supporting renewable energy and energy and resource efficiency”, said the interim report by the EU high-level group on sustainable finance. [

Maersk Drilling / Flickr]

A group of financial experts has set out its vision for hardwiring sustainability goals into the European Union’s financial system, calling on the 28-country bloc to stop pouring public money into polluting fossil fuels and focus spending on clean energies instead.

The EU’s high-level group on sustainable finance issued its interim report on Thursday (13 July), urging the European Union to stop all public funding for fossil fuel industries such as coal, oil and gas.

The upcoming revision of the EU’s multi-annual budget is “a significant opportunity” to increase investments in clean technologies and “explicitly exclude fossil fuels and other unsustainable projects” from public funding, the group wrote in its report.

Instead, public money should be geared towards “only supporting renewable energy and energy and resource efficiency”, the report added.

The EU high-level group on sustainable finance was set up by the European Commission last December to look into ways of nudging the financial system towards long-term environmental and social objectives.

Its chairman, Christian Thimann, told EURACTIV in a recent interview that the group was looking into “penalties” on fossil fuel assets that may end up stranded as investors gradually shift to low-carbon portfolios.

“Think of stranded assets: maybe we are valuing oil reserves today that the world will never exploit and that will therefore lose value. So we may be overestimating their financial value and ignoring a risk which could be taken into account,” said Thimann, who is the head of sustainability at French insurance group AXA.

Fossil fuel divestment

The report…