What is the EU Taxonomy?
The EU taxonomy is a cornerstone of the EU’s sustainable finance framework and an important market transparency tool. It helps direct investments to the economic activities most needed for the transition, in line with the European Green Deal objectives.
The taxonomy is a classification system that defines criteria for economic activities that are aligned with a net zero trajectory by 2050 and allows financial and non-financial companies to share a common definition of economic activities that can be considered environmentally sustainable.
In this way, it plays an important role in helping the EU scale up sustainable investment, by creating security for investors, protecting private investors from greenwashing, helping companies become more climate-friendly and mitigating market fragmentation.
The Taxonomy Regulation entered into force on 12 July 2020.
Under the Taxonomy Regulation, the Commission had to come up with the actual list of environmentally sustainable activities by defining technical screening criteria for each environmental objective through delegated and implementing acts.
