The EU has unveiled a new green finance strategy to support the continent’s shift towards a low carbon energy system.
It says as climate change worsens and global resources become increasingly depleted, urgent action and increased funding are needed to adapt to a more sustainable model.
The Commission believes if the goals of the Paris Agreement are to be achieved, around €180 billion (£160bn) of additional investments will be required each year.
It has laid out a series of proposals to make sure this is possible, including establishing a common language for sustainable finance, identifying how to make the biggest impacts and creating labels for green financial products to increase investor confidence.
It also suggests clarifying the role of asset managers and institutional investors in taking sustainability into account in the investment process, enhancing disclosure requirements, advising clients and increasing transparency.
First Vice-President of the EU Commission, Frans Timmermans, said: “Moving to a greener and more sustainable economy is good for job creation, good for people and good for the planet. Today we are making sure that the financial system works towards this goal.
“Our proposals will allow investors and individual citizens to make a positive choice so that their money is used more responsibly and supports sustainability.”