Written by Stefano Spinaci.
The EU’s commitment to the objectives of the Paris Agreement, and the ambitious European Green Deal, require significant investment. It is estimated that hundreds of billions of euros are needed in the current decade to reach the carbon reduction targets.
The EU taxonomy is a classification system that aims to channel public and private investment into environmentally sustainable economic activities in order to achieve environmental objectives, such as those in the fight against climate change.
It establishes a dynamic list of economic activities considered to be environmentally sustainable, provided they contribute substantially to at least one environmental objective and do not significantly harm any other. The European Commission claims that such a common understanding of what constitutes environmentally sustainable investment can facilitate the funding of the transition to a more sustainable economy by bringing clarity to investors, avoiding market fragmentation and reducing the risk of greenwashing.
While the basic legal act for the taxonomy is already in force, the process of establishing detailed criteria on how to classify activities as green is ongoing. A first delegated act on reporting obligations of companies was adopted on 6 July 2021.
The focus of this briefing is the two delegated acts determining which activities should be considered as sustainable and contributing to the fight against climate change, and be reported as such. The first climate delegated act came into force on 1 January 2022, establishing criteria for activities helping to mitigate or adapt to climate change. Activities in the nuclear and gas sectors are the subject of a complementary delegated act proposed by the European Commission on 2 February 2022.
Read the complete briefing on ‘EU taxonomy: Delegated acts on climate, and nuclear and gas‘ in the Think Tank pages of the European Parliament.
Listen to policy podcast ‘EU taxonomy: Delegated acts on climate, and nuclear and gas‘ on YouTube.