European Commission Technical Report on EU taxonomy: setting out the basis for a future EU taxonomy in legislation
In order to inform its work on the action plan “Financing Sustainable Growth” published in March 2018, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018 and followed through on this action in May 2018 with a proposal for a regulation on the establishment of a framework to facilitate sustainable investment.
Within the framework of the proposed taxonomy regulation, the TEG has been asked to develop recommendations for technical screening criteria for economic activities that can make a substantial contribution to climate change mitigation or adaptation, while avoiding significant harm to the four other environmental objectives.
On 18 June 2019, the TEG published its Technical Report on EU taxonomy setting out the basis for a future EU taxonomy in legislation. The EU Taxonomy is an implementation tool that can enable capital markets to identify and respond to investment opportunities that contribute to environmental policy objectives. Decisions by investors to allocate capital or influence company activities will be making a substantial contribution to climate goals and to the related SDGs.
The TEG report on EU taxonomy is accompanied by a call for feedback which was held from 3 July until 16 September 2019. Stakeholders were invited to provide feedback on the proposed climate change mitigation activities, climate change adaptation principles and criteria, usability of the proposed taxonomy and future development of the taxonomy.
On 5 December 2019 co-legislators reached a common understanding on the taxonomy for green economic activities. The deal is subject to approval by the European Parliament and the Council.