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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This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 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. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.