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ARTICLE · 02 FEBRUARY 2026

Quoted: Sustainable Financing – Shifting Towards The Transition

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In the European Union's (EU) policy context, sustainable finance is understood as finance to support economic growth while reducing pressures on the environment to help reach the climate and environmental objectives...

LuxembourgFinance and Banking
Loyens & Loeff
Loyens & Loeff

Sustainable Financing - shifting towards the transition

1. Introduction

In the European Union's (EU) policy context, sustainable finance is understood as finance to support economic growth while reducing pressures on the environment to help reach the climate and environmental objectives of the European Green Deal,1 taking into account social and governance aspects.2 Sustainable finance is about financing both what is already environment-friendly today (green or sustainability-linked finance) and what is transitioning to environment-friendly performance levels over time (Transition Finance). Transition Finance is any form of financial support that helps decarbonise high-emitting activities or enables the decarbonisation of other economic activities.3 Standards have been developed for green and sustainability-linked finance for European financial markets (para. 3). No such standards have been developed for Transition Finance yet, which is seen by COP284 as

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