Agreement On Taxonomy
To be considered an environmentally friendly economic activity within the framework of taxonomy, activity must not only contribute significantly to one of the objectives described above, but also meet the following criteria: one of the main objectives of the action plan is to redirect capital flows towards sustainable investments in order to achieve sustainable and inclusive growth. The most important and urgent measure in the action plan is the establishment of a uniform classification system for activities that contribute to environmental objectives. The Commission believes that eu-wide taxonomy will have the advantage of both avoiding fragmentation of the systems of different Member States and avoiding the practice of “greenwashing” – when a company gains an unfair competitive advantage by marketing a financial product in an environmentally friendly manner if, in fact, it does not meet basic environmental standards. In addition, the standardisation of the concept of environmentally friendly investment in the EU and between Member States should facilitate investment in environmentally friendly economic activities. The regulation recognises six types of economic activities which, in the sense of taxonomy, are considered environmentally friendly activities: the new taxonomy is intended to create a common and clear understanding between markets and market participants of what is an environmentally friendly activity. This should facilitate cross-border investment by minimizing the risk of market fragmentation due to different classification systems in different legal systems. The EU also hopes that cash flows will redirect cash flows towards more sustainable investments through greater transparency and strict criteria introduced by the taxonomy regulation. Nuclear energy and natural gas have not been explicitly excluded or included in the list of environmentally eligible economic activities. 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. The future sustainability framework will be based on six EU environmental objectives.
These will include measures to combat climate change, adapt to climate change, sustainable use and protection of water and sea resources, transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems.