Perspective

What is the EU Green Deal and how might it impact business?


The EU Green Deal is a policy framework and package that aims to transform the European economy with the overarching goal of achieving climate neutrality by 2050 and increasing ambition in existing emissions reduction targets.

Announced in 2019, this multi-year project will create new and revamp existing policies, including the EU’s first ever Climate Law. It is ambitious, far-reaching and will impact almost all sectors of the economy.

In addition, the plan focuses on policies and strategies to ensure the supply of clean and affordable energy, establish a circular economy, eliminate pollution, safeguard biodiversity, and create sustainable food and transport systems.

A combination of financial and real economy (the real economy refers to the production and flow of goods and services within an economy) policies have been proposed to achieve this climate ambition. We have highlighted key elements below, though there is a much longer list (~50) of associated policies and initiatives.

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What are the investment implications?

We think that the Green Deal will have major structural implications for the EU economy in the coming decades, impacting everything from the way we produce and use power, to how we travel, heat our homes, and even how we eat.

This will provide significant opportunities for industries and companies that are well placed to take advantage of the transition.

We believe that the major policy areas highlighted in the Green Deal can be mapped to four key investment themes. Understanding how these policies can affect industries and companies will be key to investors’ analysis and decision-making.

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The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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James Brennan

James Brennan

Portfolio Director james.brennan@cazenovecapital.com