While some financial institutions are funding dirty energy, others are investing in more environmentally friendly opportunities. The European Investment Bank is supporting environmental initiatives by pledging to invest $17 billion in water-related projects over the next three years, Reuters reported.
The EIB is the lending arm of the European Union, financing large projects in infrastructure, innovation, and climate action. This investment, which the EIB announced earlier this month, will support businesses in the water sector and projects that reduce water pollution and prevent water waste, according to Reuters.
Through supporting these projects, the EIB aims to address water shortages and droughts, which have intensified due to climate change, Reuters explained. Water stress affects 20% of Europe's lands and 30% of its population annually, according to a 2024 European Environment Agency report.
The EIB's $17 billion investment furthers its commitment to climate action. In 2024, the bank put nearly $102 billion toward initiatives in energy security, innovation, and climate action. Some water-related initiatives resulted in safer drinking water, improved sanitation services, and reduced flood risk for millions of people, EIB reported.
"This is where water meets business. It's by developing the technology of the future we will be able to meet these water challenges," EIB water division head Edouard Perard said about the bank's latest investment.
The investment will take place in the form of loans, according to Reuters, and the bank seeks to secure more money from commercial investors. Investors are shifting away from dirty energy and toward greener projects. Banks made more money financing these projects than dirty energy for the second consecutive year, according to Bloomberg.
While corporations remain responsible for a majority of the world's pollution, green finance presents an opportunity for these companies to put their profits toward environmental solutions. The EIB's investment in water-related solutions will be carried out from 2025 to 2027.
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