Climate Benchmarks: The European Union misses out on the Paris Agreement

The European Union's 'benchmarks regulation' introduces the Paris Aligned Benchmark (PAB) and the Climate Transition Benchmark (CTB) to guide green financial indices. However, the author contends these are inadequate because they lack requirements for absolute greenhouse gas emission reductions and do not guarantee the exclusion of companies developing new fossil fuel projects. The document calls for the development of indices that include absolute emission reduction targets, a ban on new fossil fuel projects, reinforced exclusion thresholds, and a dynamic fossil fuel phase-out approach.

• The EU's proposed Paris Aligned Benchmark (PAB) and Climate Transition Benchmark (CTB) are considered insufficient for Paris Agreement alignment because neither mandates an absolute reduction in greenhouse gas emissions, and the PAB fails to ensure the exclusion of firms developing new fossil fuel projects.
• Passive index management, which accounts for over 20% of assets under management globally, often lacks the climate alignment policies applied to active assets; for instance, BlackRock and Lyxor AM do not apply their coal policies to their passive assets.
• To achieve a sustainable climate trajectory, the document recommends that indices based on the PAB incorporate four additional criteria: absolute annual emission reduction targets, exclusion of new fossil fuel project developers, stronger exclusion thresholds, and a dynamic fossil fuel phase-out strategy.

APA

admin (2020). Climate Benchmarks: The European Union misses out on the Paris Agreement. Reclaim Finance. https://reclaimfinance.org/site/en/2020/11/27/climate-benchmarks-european-union/

Chicago

admin. Climate Benchmarks: The European Union misses out on the Paris Agreement. Reclaim Finance, 2020. https://reclaimfinance.org/site/en/2020/11/27/climate-benchmarks-european-union/.

Wikipedia

{{cite press release |last1=admin |title=Climate Benchmarks: The European Union misses out on the Paris Agreement |publisher=Reclaim Finance |date=27 November 2020 |url=https://reclaimfinance.org/site/en/2020/11/27/climate-benchmarks-european-union/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{admin2020climate, author = {admin}, title = {{Climate Benchmarks: The European Union misses out on the Paris Agreement}}, publisher = {Reclaim Finance}, year = {2020}, month = nov, url = {https://reclaimfinance.org/site/en/2020/11/27/climate-benchmarks-european-union/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }