The EU looks towards green coronavirus recovery

European politicians, companies, lawmakers and activists called on Tuesday for green investment to restart growth after the coronavirus pandemic, saying fighting climate change and promoting biodiversity would rebuild stronger economies.

The European Union is headed for a steep recession triggered by the outbreak, but divided on how to finance economic recovery, with the ailing south advocating issuing joint debt against the opposition of the fiscally conservative north.

With EU leaders due to meet next week to discuss the recovery plan, a group of 180 political decision-makers, business leaders, trade unions, campaign groups and think tanks urged the bloc to adopt green stimulus measures.

“After the crisis, the time will come to rebuild,” they said in a letter.

“The transition to a climate-neutral economy, the protection of biodiversity and the transformation of agri-food systems have the potential to rapidly deliver jobs, growth ... and to contribute to building more resilient societies.”

Signatories included ministers from 10 countries from Italy to Luxembourg, 79 EU lawmakers, and chief executives from L’Oreal’s (OREP.PA) Jean-Paul Agon to IKEA’s Jesper Brodin and Danone’s (DANO.PA) Emmanuel Faber.

Calling fallout from the coronavirus pandemic a shock worse than the 2008 financial crisis, the signatories said rescue measures should advance the EU’s landmark Green Deal policy package, which aims to bring the 27-nation bloc to net zero greenhouse gas emissions by 2050.

Calls for a green EU recovery have grown louder in recent days, after European finance ministers on Thursday agreed support for their coronavirus-battered economies but left open the question of how to finance the bloc’s recovery.

Ten EU countries, joined by Germany, France and Greece over the weekend, have signed a separate open letter urging the EU to ensure its rescue package supports the Green Deal.

Poland and Czech Republic are among countries asking the EU to ease climate policies amid the pandemic.

Some asset managers are also urging governments to design economic rescue packages to accelerate a low-carbon transition.

“Investors are definitely becoming bolder at wanting to now pivot the debate on post-COVID rebuilding towards broader sustainability and resilience,” said Michael Hugman, portfolio manager at asset manager NinetyOne in London.

Pascal Canfin, a French liberal EU lawmaker who initiated the Tuesday letter, said: “The Covid-19 crisis did not make the climate crisis disappear ... If we relaunch the economy in the wrong direction, we will hit the climate crisis wall.”