Eu Taxonomy Agreement

On 9 March 2020, the TEG published its final report on EU taxonomy. The report contains recommendations on the EU`s comprehensive approach to taxonomy, as well as detailed guidelines on how businesses and financial institutions can use and disclose taxonomy. The report is supplemented by a technical annex that states that nuclear energy and natural gas are not explicitly excluded or have not been added to the list of economic activities eligible for the environment. The taxonomy regulation leaves it to delegated acts – based on stakeholder input, which includes the sustainable financing platform – to determine the role of nuclear energy and/or, where appropriate, natural gas in taxonomy. As noted below, the taxonomy regulation contains a revision clause that allows the Commission to extend the regulation to other activities that seriously harm environmental objectives. Work towards the establishment of a Community system for classifying sustainable activities, i.e. an EU taxonomy, is one of the issues to be examined: should taxonomy contribute not only to defining which activities are `green`, but also to those that are `neutral` and `brown`. “Today, many companies and investors want to be able to say that they are in compliance with the Paris Agreement and the European climate targets. The taxonomy criteria for climate change and the European standard for green bonds are a sure way to show that they contribute to these goals,” says Aho.

Helena Vies, global director of sustainable management at BNP Paribas Asset Management and a member of the EU`s taxonomy platform, said the panel would study the extension of taxonomy to other activities and social goals. In order to inform the action plan, including the EU taxonomy, the European Commission set up a group of technical experts (TEG) on sustainable financing in July 2018. In December 2019, the European Council and the European Parliament reached a political agreement on the text of a proposed regulation to create a framework to facilitate sustainable investment, known as the taxonomy regulation.