“The world's first-ever green list”
After a long and difficult political process, the first common classification system for “green” economic activities is on its way to becoming a reality. The Taxonomy Regulation aims to provide investors with standardised definitions to help them evaluate the environmental impact of their investments and reduce “greenwashing”. It distinguishes between six environmental objectives and prescribes methods for evaluating economic activities according to these objectives.
Climate change mitigation
Climate change adaptation
Sustainable use and protection of water and marine resources
Transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems
Detailed technical screening criteria for each environmental objective are also being developed, with the first delegated acts (for environmental objectives 1 and 2) expected in December 2020. The criteria will likely be based on the June 2019 proposals by the technical expert group on sustainable finance. Furthermore, detailed regulatory technical standards for a corresponding disclosure is envisioned, starting from mid-2021.
Political agreement on the Taxonomy Regulation text was confirmed by the Council’s Committee of Permanent Representatives (COREPER) on 5 February 2020, marking another step towards its finalisation. The final Regulation is expected to be published in the Official Journal in May 2020.