Despite the importance of Germany’s economic and financial system, a comprehensive analysis framework for assessing progress towards operationalising Article 2.1(c) of the Paris Agreement is missing. Without understanding how Germany’s public and private finance flows are (mis)aligned with the Paris Agreement, there is a risk that long-term mitigation and adaptation goals will be missed.
This report from the Finance Working Group of the independent Global Stocktake (iGST) identifies a set of relevant themes and categories for assessing Germany and the EU’s finance flows against ambitious plans to reduce emissions and reach net-zero. Central pillars for assessing the pathway towards 2.1(c) alignment are outlined in its sustainable finance strategy and include the EU taxonomy, disclosure regulation and a green bond standard. However, the timeline for implementation has been delayed and financial sector targets, regulatory instruments and adaptation-related activities remain vague.