The Quiet Dismantling of Ambition
The EU’s 2040 climate target is on track to be met — just not by the EU.
In July, the European Commission will publish its long-awaited 2040 climate roadmap. According to recent reports, the headline 90% emissions reduction target will stay. But in place of leadership, we’re getting pragmatism. In place of accountability, we’re offered flexibility.
The latest signal came from Politico’s leak of a Commission draft and an unusually sharp rebuke from the EU’s own Climate Advisory Board. It looks like the 2040 target will permit the use of international carbon credits, allowing EU countries to meet their decarbonisation goals by paying others to cut emissions — rather than cutting their own.
This is not what the science said.
In 2023, the EU’s own Scientific Advisory Board made it very clear: a 90% reduction should happen within the EU. Not abroad. Not offset. Not outsourced. And certainly not greenwashed. Their reaction now is blunt: “We do not recommend using international carbon credits to replace domestic emission reductions when meeting the 2040 target.”
This isn’t simplification. It’s sleight of hand.
The logic of deferral
Over the past year, “simplification” has become the political keyword in EU sustainability policymaking. CSRD? Delayed. SFDR? Rethought. Omnibus? Watered down. Now, “pragmatism” is joining the chorus — just in time to allow structural avoidance of uncomfortable decisions.
The ECB warned of this just weeks ago. In its formal opinion on the Omnibus proposal, it cautioned that watering down sustainability reporting will undermine financial stability. You can’t supervise risks you don’t measure. You can’t price transition if it’s invisible.
Carbon credits may play a role in financing global decarbonisation. But dressing them up as domestic ambition is misleading at best, and dangerous at worst. It creates the illusion of progress while keeping structurally high-emitting sectors untouched.
Why it matters — and what we’re building
At SWISOX, we’ve always said that sustainability is first and foremost a data problem. That’s why we built a transparent, taxonomy-aligned system for identifying sustainable companies — not based on promises or offsets, but on actual reported activities.
Our Traffic Light System begins with a Green List of 70+ companies that meet hard criteria (55%+ taxonomy alignment, Paris-Aligned Benchmark exclusions, and no new fossil projects). You can explore it at studio.swisox.com, where we invite criticism, questions, and challenge. The logic behind every inclusion is public. The methodology is evolving. The red and amber categories are next.
As governments fall back, it’s up to us — financial professionals, civil society, and technical experts — to hold the line on credibility.
Because if sustainability becomes optional, then climate stability becomes theoretical.