REPORT on the financial activities of the European Investment Bank – annual report 2019 - A9-0081/2020

on the financial activities of the European Investment Bank annual report 2019 (2019/2126(INI)) The European Parliament, having regard to Articles 15, 126, 175, 174, 177, 208, 209, 271, 308 and 309 of the Treaty on the Functioning of the European Union (TFEU) and to Protocol No 5 thereto on the Statute of the European Investment Bank (EIB), having regard to the 2019 EIB Group Operational Plan, published on the EIB website, having regard to the 2018 Activity Report of the EIB, entitled Opportunity Delivered, having regard to the 2018 Financial Report and Statistical Report of the EIB, having regard to the EIB report entitled EIB operations inside the European Union Annual Report 2018, published in 2019, having regard to the EIB report entitled The EIB outside the European Union Financing with global impact Annual report 2018, published in 2019, having regard to the EIB report entitled Annual Report 2018: European Investment Advisory Hub, published in 2019, having regard to the new climate strategy and the new lending policy in the energy sector, adopted by the EIB in November 2019, having regard to Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub[1], having regard to the recommendation of the European Ombudsman in case 146/2017/DR on how the European Investment Bank handled a complaint about breaches of environmental, health and safety requirements in a project it financed, having regard to the Commission communication of 11 December 2019 on The European Green Deal (COM(2019)0640), having regard to the Commission communication of 14 January 2020 on Sustainable Europe Investment Plan, European Green Deal Investment Plan (COM(2020)0021), having regard to the Commission proposal for a regulation of 14 January 2020 establishing the Just Transition Fund (COM(2020)0022), having regard to the Commission communication of 8 March 2018 entitled Action Plan: Financing Sustainable Growth (COM(2018)0097), having regard to the EIB Economic Resilience Initiative, having regard to the EIBs approval of the ratification of the Paris Agreement by the EU of 7 October 2016, having regard to the UN 2030 Agenda for Sustainable Development and the Sustainable Development Goals, having regard to the opening speech delivered on 16 July 2019 by Ursula von der Leyen as candidate for President of the European Commission, at Parliaments plenary session in Strasbourg, having regard to the speech by the President of the European Commission, Ursula von der Leyen, delivered on 11 December 2019 at Parliaments plenary session in Brussels, having regard to Article 3 of the Treaty on European Union, having regard to Rule 54 of its Rules of Procedure, having regard to the opinion of the Committee on Economic and Monetary Affairs, having regard to the report of the Committee on Budgets (A9-0081/2020), A.whereas under Article 309 TFEU and having regard to the case law of the Court of Justice of the European Union, the EIB is to contribute to the achievement of the Unions objectives, and whereas under Article 18 of the Statute of the EIB it must use its funds as rationally as possible in the interests of the Union; whereas this includes complying with the Paris Agreement on Climate Change and the Unions environmental protection obligations set out in Articles 11 and 191 TFEU, B.whereas the main credit rating agencies have given EIB bonds an AAA rating, due inter alia to the fact that the EIB belongs to the Member States and to its prudent risk management; C.whereas EIB maintained profitability in 2018, with a net surplus of EUR 2.3 billion; whereas the EIB Group should maintain its high level of creditworthiness as well as a portfolio of solid and good-quality assets; D.whereas the EIB, being the worlds largest multilateral borrower and lender, and jointly owned by EU Member States, is the EUs natural partner for the implementation of financial instruments, in close cooperation with national and multilateral financial institutions; E.whereas the EIB Group is treaty-bound to contribute to EU integration, economic and social cohesion and regional development, through various investment instruments such as loans, equities, guarantees, risk-sharing facilities and advisory services; F.whereas the Commission estimates the annual investment needed to achieve the EUs 2030 targets at EUR 1 115 billion[2]; whereas the Commissions Sustainable Europe Investment Plan aims to unlock EUR 1 trillion worth of investment in the next decade; G.whereas sustainable investments normally have higher yields than standard ones and volumes therefore tend to be subdued while the associated risks tend to be higher; whereas the liquidity of the markets in sustainable financial products must be deepened and this can only be done by increasing the number of products on the market; highlights that the private sector alone cannot be expected to reach the critical mass and that the public sector must be more present in the sustainable financial assets markets and increase its market share, hence contributing to reducing risks and yields, as well as to increasing market participation and liquidity; H.whereas the EIB plays an important role in the EU's strategy to tackle climate- and environmental-related challenges - challenges that are this generation's defining task, as outlined by the Commission, with EUR 260 billion of additional investments needed annually to achieve the current 2030 climate and energy targets; I.whereas continuous attention should be focused on the development of best practices related to the EIB Group's performance policy and management, governance and transparency; General advice 1.Highlights the importance of the activities of the EIB, as the Unions bank, with regard to increasing current levels of investment in the EU, which are below historical averages and insufficient to fulfil the EUs sustainability, economic, social and job creation ambitions or to achieve regional cohesion, innovation and competitiveness at EU level as well as financing at the local level, including by municipalities that answer to the needs of citizens; 2.Recognises that the EU and the Member States need to invest more in the fight against climate change, the digital revolution and public services; 3.Notes the worsening world economic climate, in which real GDP growth has slowed and global challenges are contributing to uncertainty; notes the weak levels of investment in the EU in the past decade; calls for more public and private investment in the EU at national, regional and local levels; 4.Notes the EIB's Investment Report 2019-2020, which highlights the challenges that the EU is facing in terms of competitiveness, such as rising inequality and insufficient levels of investment, especially in climate-related R&D and digitalisation, which threaten Europe's economic future; urges the EIB to do its utmost to address these issues in its activities; 5.Notes that in 2018 the EIB invested EUR 64 billion in 854 projects; notes that the EIB adheres to the prudential principle with only 0.3% non-performing loans; 6.Reiterates the need to make the geographical distribution of EIB financing more balanced; calls for the EIB to address systemic shortcomings that prevent certain regions or countries from taking full advantage of its financial activities, inter alia by strengthening its efforts to expand its loan activities by providing technical assistance and advisory support, especially in regions with low investment capacity, and by advising on the development of projects, with a view to promoting inclusive growth and economic, social and territorial convergence and cohesion and considering the demand-driven nature of EIB financing; 7.Calls for the EIB to play an important role in enhancing sustainable finance both in and outside Europe, and to prioritise through its lending activities the implementation of the 17 Sustainable Development Goals (SDGs) of the UN 2030 Agenda for Sustainable Development by further unlocking investment in social, green and sustainable projects; 8.Calls for adequate support to strengthen the arrangements for providing technical assistance, financial expertise and capacity-building to local and regional authorities before project approval, in order to improve accessibility and involve all Member States; in this regard also calls for increased support for advisory services such as the InvestEU Advisory Hub, Jaspers, Elena and Fi-compass; calls for intensified cooperation with national promotional banks and institutions; 9.Welcomes the EIB's timely efforts to support the projects it is financing in their implementation stage (by providing experts and support instruments and by producing preparatory studies); asks the EIB and the Commission to work together to draw up proposals for more systematic involvement of the EIB's teams in project implementation in countries which request this, particularly in areas requiring advanced expertise or which are of strategic importance to the Union, such as the fight against climate change; 10.Welcomes the EIB's support for cohesion objectives, amounting to more than EUR 200 billion between 2009 and 2018 alone; 11.Calls on the EIB to lay stress on its consultations with all stakeholders affected by its projects, in particular local communities, civil society and the general public; 12.Considers that innovation and skills are fundamental elements for ensuring sustainable growth and creating high-quality jobs and driving long-term competitiveness; welcomes the fact that in 2018 the EIB supported innovation and skills with EUR 13.5 billion; expects continuing support by the EIB for innovation and skills; 13.Considers that Europe needs to accelerate the adoption of digital technologies and investment in digital infrastructure and skills in order to stay competitive; calls on the EIB to address the technological transition with enhanced support for digitalisation; 14.Regards the 10 standards laid down in the EIBs social and environmental manual as of paramount importance and as being a precondition for participation in its lending operations, including in the areas of pollution prevention and abatement, biodiversity and ecosystems, climate-related standards, cultural heritage, involuntary resettlement, rights and interests of vulnerable groups, labour standards, occupational and public health, safety and security and stakeholder engagement; 15.Calls on the Commission to pay special attention to ensuring that EU fiscal rules support future efforts to increase the level of public investment in the EU, which will allow the EIB to leverage that investment; 16.Considers that social projects' evaluation criteria should take into account the principles of the European Pillar of Social Rights; underlines, in this context, the importance of carrying out ex ante and ex post evaluations of the sustainability, competitiveness and economic, social and environmental impacts of projects; 17.Welcomes the steps the EIB has taken so far; calls on the EIB to improve its reporting and evaluation of actual results achieved and its analysis of the actual economic, social and environmental impacts of its investments; 18.Calls on the EIB to follow up on the conclusions of the Court of Auditors special report 03/2019, which assessed whether the European Fund for Strategic Investments (EFSI) was effective in raising finance to support additional investments within the whole EU; notes that the report concluded that some EFSI operations simply replaced other EIB operations and that part of the financing went to projects that could have used other sources of public or private finance, resulting in some cases in overstatement of the extent to which EFSI support actually induced additional investments; 19.Stresses that EFSIs key quantitative target of mobilising EUR500billion of additional private and public investment should not be the main driver of success for the fund, and that measurable targets on sustainability, additionality, geographical coverage and social impact should be at least equally important in future investment strategies; 20.Calls on the EIB to increase the share of EFSI and InvestEU financing for projects that substantially contribute to the EUs sustainability and social objectives, in line with the relevant EU regulations; calls on the Commission to ensure that InvestEUs sustainability-proofing methodologies are fully consistent with the EUs sustainability objectives, and that evaluation criteria for social projects take into account the principles of the European Pillar of Social Rights; underlines, in this context, the importance of carrying out ex ante and ex post evaluations of the sustainability, competitiveness and economic, social and environmental impacts of projects; 21.Considers that further external evaluation of the additional nature of the EIBs lending policy is needed, and that the results of this evaluation should be made available to the public; 22.Is of the opinion that following publication of the results of the external evaluation, it should be considered whether there is a need for a general increase of the EIB's capitalisation to allow for more long-term loans and innovative instruments in the financing of projects, with substantial potential for sustainability and social and innovation gains, including projects creating sustainable growth and reducing inequalities; 23.Calls for the EIB to ensure close coordination, coherence and consistency between EU policies, funding instruments and investments, with a view to avoiding overlaps and enhancing funding synergies; An EIB more focused on climate and a just transition 24.Welcomes the decisions taken on 14 November 2019 by the EIBs Management Board to align the EIBs policies with the goal of limiting global warming to a maximum of 1.5C above pre-industrial levels; 25.Acknowledges that more risk-taking by the EIB may be necessary, especially in sectors and regions attracting less investment, in order to achieve the above-mentioned ambitions and those put forward in the Green Deal, provided that such lending complies with EIB eligibility criteria and that the EIB maintains its AAA rating; 26.Welcomes the fact that the EIB is the world's largest issuer of green bonds and a pioneer in launching the successful green bonds which have raised more than EUR 23 billion over 11 years, with the global green bond market now worth more than EUR 400 billion; notes that a major challenge has been to set common standards so as to avoid greenwashing; welcomes the EIB's new Sustainability Awareness Bonds, launched in 2018 and designed to support investment related to the UN Sustainable Development Goals; underlines the importance of setting common standards regarding these new bonds to ensure that projects are transparent, verifiable and measurable; calls on the EIB to continue and to expand the issuance of green bonds, aimed at facilitating implementation of the European Green Deal and to be purchased by the European Central Bank, and to help develop the green bonds market built on work under the EU Action Plan on Financing Sustainable Growth, including the EU Sustainable Finance Taxonomy; 27.Calls for the European Investment Fund (EIF) to be fully integrated into all EIB climate measures; calls on the EIF to give greater priority to innovation needs for the transition to a climate-neutral Europe; calls on it to ensure that in all its investments it is actively engaging with investee companies on enhancing their climate-related disclosures, reducing their emissions, and steering investment towards cost-effective alternatives (e.g.