The shadow chancellor, John McDonnell, has pledged to use “every lever of government possible” to tackle climate change. And his latest idea is to go after the big players on the London Stock Exchange, warning that UK companies failing to act to reduce carbon emissions will be delisted.

As a green economist, radical steps to address the economic drivers of our various environmental crises have been my bread and butter for years. So I welcome Labour’s newfound commitment to get serious on climate change, though its target of reducing greenhouse gas emissions to zero by 2050 can hardly be seen as treating the problem as an emergency. Greens believe we must reach net zero carbon by 2030 and that such a target is achievable.

And let’s face it, Labour’s gear change is going to be anything but smooth given the inconsistencies in its policies.

For instance, listed in the FTSE 100 – the largest UK companies on the London Stock Exchange – is easyJet. The climate impact of airlines, and especially short-haul airlines encouraging weekend breaks, is devastating. So presumably such companies would be a target for McDonnell’s delisting. Except Labour is also supporting airport expansion, thereby encouraging companies such as easyJet to increase their flights, and their carbon emissions. Airlines might justifiably challenge a government that is on the one hand encouraging their growth and on the other penalising them for doing so.

Perhaps given Labour’s fence-sitting on Europe, McDonnell has failed to notice the far more effective moves taking place in the EU, in particular the evolving sustainable finance agenda. This is something I have led on personally in the European parliament. It aims to use various levers to direct financial investments away from fossil industries and dirty businesses towards clean, green industries. Not just those listed on the London Stock Exchange but businesses throughout the EU.

Since the Paris agreement on climate change in 2015, 33 global banks have poured $1.9tn into financing fossil fuel projects worldwide. Furthermore, the World Economic Forum says that in 2018 coal use inched up and progress on energy efficiency slowed, while the World Economic Forum has concluded that growth in renewables is too slow to meet Paris goals. The result is that energy-related greenhouse gas emissions jumped by almost 2% last year.

This demonstrates how vital it is that the financial sector play its part by throwing its full weight behind the fight against climate change. The European commission’s pioneering legislative proposals will push the sector to do just this.

For example, from now on, finance players will have to inform their clients about how their investments – including pensions and insurance – are impacting on the planet. I was proud to be part of the negotiating team for this world-first mandatory discourse regime, agreed a few months ago. I’ve also pushed hard for carbon stress tests for banks, so that they can identify and then eliminate assets that will become stranded as we tackle climate change, beginning with fossil fuel assets.

Greens in the European parliament took charge of the negotiations over a “taxonomy” for sustainable investments – a classification system of economic activities identifying which investments are and aren’t sustainable as a first step towards introducing significant financial incentives. Due to our work – and in the face of significant political opposition – we have eliminated “clean coal”, nuclear energy and gas infrastructure from this sustainability taxonomy. Unfortunately, Labour seems to think setting up new coal mines is compatible with addressing a climate emergency.

It’s clear that the EU is leading on the design of financial levers to encourage a sustainability transition for the finance sector and thus for all companies. Rather than picking off the London Stock Exchange, Labour needs to embrace our continued membership of the EU. When it comes to tackling serious global issues such as climate change, and transitioning towards a green economy, we will achieve so much more working together cooperatively with our European neighbours.

• Molly Scott Cato is Green MEP for South West England and Gibraltar, and Green party finance and Brexit speaker