Financing the transition: how to use public finance smartly

Local authorities play a leading role in ecological planning. As major contributors to public investment they have core responsibilities that can significantly accelerate the transition, such as expanding public transport networks or retrofitting public buildings for energy efficiency. According to I4CE, in France, local authorities in France need to double their investments in decarbonization by 2030 -without even accounting for future adaptation costs.

Integrating climate indicators into variable remuneration is a burning issue. Although it was removed at the last minute from negotiations on the Corporate Sustainability Due Diligence Directive (CSDDD), the proposal is still very much alive in the policy debate . While the topic is becoming increasingly central to remuneration in large companies, it still appears to be a taboo within the banking sector. This requirement was already included in the European Central Bank’s supervisory guidelines as early as 2020, yet it appears to have been largely neglected by banks.

We are witnessing a withdrawal of commitments to climate action. In the US, President Donald Trump does not hide his hostility to what he calls the ‘climate hoax’. In Europe and in France, new narratives around competitiveness, strategic autonomy and security are gaining ground, reflecting a new political reality. If there is still a broad consensus on the long-term objective of climate neutrality, how to get there is increasingly challenged, generating uncertainty. The scarcity of fiscal resources impacts the willingness to embark on the green transition.