Germany, Austria, Luxembourg and Greece opposed the ministers’ text but failed to block it and amend it. T&E says the ministers’ text risks prolonging ‘greenwashing’ in financial markets, threatening people’s right to know where their money is invested and damaging the credibility of the entire industry.

Environmental NGOs are expected to campaign hard against the agreed text before a final decision is taken in November. Already more than 50 organisations have signed an appeal to support and improve an earlier list of environmentally sustainable activities compiled by a European Commission expert group. A growing environmental awareness and the desire to clean up finance promise to turn this, otherwise technical, debate into a fully fledged political fight.

Thanks to people’s demand for ‘clean savings’, the sustainable investment sector has grown dramatically in the past 10 years, with sustainable investment funds attracting around $30 trillion, a third of total assets under management. But the absence of recognised criteria for what counts as sustainable means fund managers and ‘ESG’ (environmental, social and corporate governance) rating agencies have been able to define their own criteria, with some setting the bar so low that it has been labelled ‘greenwashing’ – an attempt to portray something as environmentally friendly when it does not deserve the description. The result has been that oil, pesticides, airlines, biofuels and other environmentally destructive activities are included in many ‘sustainable’ portfolios.

In June, the European Commission’s expert group on sustainable finance published a draft list of economic activities that should be deemed ‘green and climate proof’ for asset managers to use in their marketing materials when selling ‘sustainable’ financial products. The aim is to create a gold standard for sustainable finance, so investors would have the confidence to know that their money was being used to further genuine sustainability. The world’s economy relies on substantial private investments to become sustainable.

But now ministers have proposed a delay of two years, in theory allowing another two years of ‘sustainable investments’ in unsustainable activities. The definition of ‘low-carbon energy’ has also been more ambiguous to the point where it could allow nuclear energy to be included. The Commission’s expert group excluded nuclear energy from its list of green and climate proof economic activities.

T&E’s sustainable finance and campaigns coordinator, Luca Bonaccorsi, said: ‘Investors want clean financial products to fund a sustainable economy, and currently they’re being fooled. Our savings must be protected from being invested in harmful activities, turned magically ‘green’ by rating agencies. We don’t need to waste two more years to stop fund managers from marketing oil, diesel trucks and airlines as ‘green’. We know they aren’t green. The delay is unacceptable, and civil society will not stay silent.’

Now the proposed regulation enters negotiations between governments, the European Parliament and the Commission. The parliament is set to demand changes on issues such as the date of adoption (originally set for 2021), the scope of the regulation (who it applies to) and the balance of power when setting the actual technical criteria. (Governments want a saying in setting the technical criteria too.)

Once the regulation is approved, probably before the year’s end, the battleground will move to the actual ‘list’ that must be completed via a mix of Delegated Acts and Implementing Acts at least one year before the entry into force of the new law.