Responsible Investor

European Green Deal: A game changer?

By Generali Investments’ Research Team

The European Green Deal is the EU Commission’s new growth strategy. It aims to turn the climate and environmental challenges into an opportunity to modernise the EU economy, endorsing a large investment program while targeting emissions reduction of at least 55% by 2030 and climate neutrality by 2050. 

To foster the change, the EU will deploy its budget aiming to mobilise about 0.7% of GDP annually. Overall, investment needs are estimated at 2% of EU GDP annually until 2050. The deal implies substantial structural changes: the most involved sector is energy, but the plan cuts across the whole economy. 

The Green and sustainable bond market is now at a turning point. Forthcoming sizeable green issuance in the EU will help growing and greening European finance in a more balanced and standardised way. Meanwhile, the ECB will likely add green layers to both its monetary policy and regulatory objectives. Among sectors, building and materials are the main beneficiaries while Utilities and Autos will have to adapt.

Discover more in our view: it first summarizes the plan’s goals and policy areas, the timeline, and the investment tools. Then, it looks into the European Energy statistics to identify who will be most affected by the need to reduce emissions, and digs deeper into the investment side by outlining the structure of the developing Green Bond market and a possible ECB impact. Finally, it concludes with the implications for the most affected sectors.