EC opens consultation on EU Taxonomy criteria

Europe
On the 11/23/20 at 7:42AM

by

Tuba Raqshan

The European Commission launched a public consultation on the first two sets of criteria for determining which economic activities can qualify as environmentally sustainable, under the EU’s Taxonomy.
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The EU Taxonomy Regulation, which came into force on 12 July 2020, will create the world’s first-ever “green list”, which is a classification system for sustainable economic activities. The Taxonomy will create a common language that investors and businesses can use when investing in projects and economic activities that have a substantial positive impact on the climate and the environment.

As a part of this Taxonomy Regulation, the Commission was tasked with coming forward with technical screening criteria (through ‘delegated acts’) to develop the taxonomy further. The first two sets of criteria have been published on 20 November in the draft delegated act, which is now open for feedback for the next four weeks. The Commission will consider the feedback received before finalising the adoption of the delegated act, which will then be subject to scrutiny by the European Parliament and will apply from 1 January 2022. The draft texts of the delegated acts published for public consultation can be accessed here.

The criteria open for consultation concerns activities that substantially contribute to climate change mitigation or climate change adaptation. The activities and criteria are based on the recommendations of the Technical Expert Group on Sustainable Finance (TEG) published in March 2020.

The EU's Taxonomy Regulation is a key piece of legislation that is central to the European Green Deal, said Mairead McGuinness, commissioner for financial services, financial stability and capital markets union. “It will be instrumental in channelling investment to green and sustainable projects. By contributing to this public consultation, you can have your say on the development of these rules,” added McGuinness.

Will Martindale, PRI’s director of policy and research, said that as part of the consultation process, the Commission must ensure that the final rules are consistent with the highest level of scientific rigour and the principles laid out in the Taxonomy Regulation. “Robust standards matter for sustainable capital markets. As a disclosure tool, the Taxonomy provides clear guidance to financial markets on what counts as sustainable. Robust standards also matter for European citizens as savers and investors, who also need credible, accessible information on the sustainability performance of financial products,” said Martindale.