Currently, green bonds are more likely to be held cross border than other European bonds; Environmental, Social and Governance (ESG) funds appear more stable, as investors are less likely to withdraw funds following negative performance than investors in other types of funds; and there is evidence to suggest that equity funding could help incentivize green innovation and greener activities.
In short, scaling up green finance can be a driver for a carbon neutral economy, financial integration and stability in the euro area. Strengthening the Capital Markets Union (CMU). The strengthening of the CMU is necessary for the completion of European Economic and Monetary Union because it will reduce market fragmentation and encourage diversification of financial resources.