20 Nov Taxonomy: What activities do substantially contribute to climate change mitigation or climate change adaptation?
The European Commission has published through a draft delegate act the first two sets of criteria for determining which economic activities can qualify as environmentally sustainable, under the EU’s Taxonomy. The EU’s Taxonomy Regulation, which entered into force on 12 July 2020, will help create the world’s first-ever “green list” – a classification system for sustainable economic activities – that 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 part of the 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 today been published in a draft delegated act, which is now open for feedback. It concerns those 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, which represented an excellent basis for the Commission’s work.
According to Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union: “The EU’s Taxonomy Regulation is a key piece of legislation that is central to the European Green Deal. It will be instrumental in channeling investment to green and sustainable projects.”
The European Commission has launched a public consultation whose feedback will be considered before finalising the adoption of the delegated act. It will then be subject to scrutiny by the European Parliament and the Council and will apply from 1 January 2022.
The draft texts of the delegated acts published for public consultation are available here.