On August 27, 2024, a coalition of climate activist groups filed a lawsuit against the European Union (EU) over the classification of aviation and shipping as “green” investments. The lawsuit, brought before the European Court of Justice, challenges the EU Commission’s decision to label these industries as sustainable, despite limited greenhouse gas (GHG) emission reductions. This case could force the Commission to review its standards for green investments. 

The EU’s green transition is driven by its European Green Deal, including key regulations like the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy. Both frameworks aim to create clear guidelines for businesses and investors, promoting environmental, social, and governance (ESG) practices. However, environmental groups argue that the current criteria for the aviation and shipping sectors undermine the goal of a carbon neutral strategy by allowing investments that do not support significant GHG reduction. 

NGOs behind the lawsuit claim the standards fail to align with the 1.5°C climate pathway and may delay the development of low-carbon alternatives. They argue that under the current rules, even large cruise ships running on liquefied natural gas (LNG), which emits both CO2 and methane, could be classified as green investments. 

This lawsuit highlights ongoing tensions around the EU’s approach to ESG and the carbon neutral strategy, with the final outcome likely to influence future regulations. 

Sources: 

https://www.forbes.com/sites/jonmcgowan/2024/08/30/climate-activists-sue-european-union-over-green-finance-standards-for-airlines/ 

https://www.climatechangenews.com/2024/08/28/eu-hit-with-lawsuit-over-green-labelling-of-aviation-and-shipping-investments/ 

https://www.climate-court.com/post/ngos-appeal-eu-taxonomy-standards-for-aviation-and-shipping-industries 

https://www.euractiv.com/section/energy-environment/news/ngos-slap-commission-with-lawsuits-over-2030-climate-targets-green-shipping-and-aviation/