Platform on Sustainable Finance report: Monitoring capital flows to sustainable investments

The Platform on Sustainable Finance, an advisory body to the European Commission, has published an independent report on financing a clean and competitive transition: monitoring capital flows to sustainable investments.

Taking stock periodically of sustainable investments and their financing is a powerful tool for informing policymaking and guiding an orderly, competitive, and clean transition in the EU – one of the key imperatives set by the competitiveness compass. The final report introduces a novel framework for monitoring capital flows to sustainable investments, primarily leveraging EU taxonomy data. By consolidating regulatory and market data, the report provides new insights into the state – and reality – of large European corporates’ transition efforts. Taxonomy data, despite the on‑going simplification of disclosures, remains a highly relevant and effective tool for assessing the volume and allocation of sustainable investments.

The analysis of 2180 large listed European companies reveals that in the first two years of disclosures, firms started to make a more systematic disclosure of taxonomy‑aligned capital expenditures (CapEx).

Key findings of the report

• Sustainable investments are gaining momentum: taxonomy‑aligned CapEx from large listed European firms reached EUR 250 billion in 2023, a 34% increase from the previous year. Half of this was directed toward enabling activities (+40% year‑on‑year), while transitional activities more than doubled, accounting for 11% of total taxonomy‑aligned CapEx
• Transition‑related capital flows are emerging: about EUR 206 billion in additional investments, while not yet fully taxonomy‑aligned, potentially contribute to European companies’ transition. Most of this CapEx was directed toward taxonomy‑eligible activities, underscoring the importance of linking credible transition plans with investment tracking, as well of tracking alignment with some but not all taxonomy criteria
• Progress towards a sustainable transition varies significantly across different sectors
• Debt financing dominates sustainable investment flows: green bonds remain the primary financing instrument, with annual EU issuance exceeding EUR 200 billion since 2021. Outstanding green loans stood at EUR 908 billion in 2023, while green bond volumes reached EUR 781 billion, bringing total outstanding green debt finance to EUR 1.69 trillion

The Platform on Sustainable Finance presented the report in a webinar on Tuesday 11 March 2025. You can watch the recording of the webinar below.