Sustainable finance: Council adopts a unified EU classification system & Feedback: Delegated Regulation
The EU is putting in place a common classification system to encourage private investment in sustainable growth and contribute to a climate neutral economy.
The Council today adopted a regulation setting out an EU-wide classification system, or "taxonomy", which will provide businesses and investors with a common language to identify those economic activities which are considered environmentally sustainable.
The taxonomy will enable investors to refocus their investments on more sustainable technologies and businesses. It will be key to enabling the EU to become climate neutral by 2050 and achieve the Paris agreement's 2030 targets. These include a 40% cut in greenhouse gas emissions, for which the Commission estimates that the EU has to fill an investment gap of about 180 billion EUR per year.
The future framework will be based on six EU environmental objectives:
1) climate change mitigation;
2) climate change adaptation;
3) sustainable use and protection of water and marine resources;
4) transition to a circular economy;
5) pollution prevention and control;
6) protection and restauration of biodiversity and ecosystems.
The taxonomy for climate change mitigation and climate change adaptation should be established by the end of 2020 in order to ensure its full application by end of 2021. For the four other objectives, the taxonomy should be established by the end of 2021 for application by the end of 2022.
Today's decision was adopted by written procedure. It means that the Council has adopted its position at first reading. The regulation now needs to be adopted by the European Parliament at second reading before it can be published in the Official Journal and enter into force.
Council's first reading position on the taxonomy of sustainable activities
Open for feedback: Delegated Regulation: Climate change mitigation and adaptation taxonomy
The Delegated Regulation establishes a classification of environmentally sustainable economic activities (‘taxonomy’) substantially contributing to the EU’s objectives on climate change adaptation and mitigation for investment purposes.
Consultation of citizens and stakeholders: There have been several rounds of open calls for feedback informing the work of the TEG. The TEG consulted on their interim report on taxonomy from December 2018 to January 2019 and on the technical report from June to September 2019. In addition, the TEG organised several workshops in March 2019 with additional experts on the sectors covered by their work. A stakeholder dialogue on the TEG’s reports took place on 24 June 2019 and another took place on 12 March 2020. Given the various rounds and forms of stakeholder engagement and feedback of the TEG concerning their recommendations, there will be no further specific public consultation. However, stakeholders will be able to provide feedback on this inception impact assessment. They will also have the opportunity to provide feedback on the expected use of the EU taxonomy more broadly and in the context of the open public consultation on the Renewed Sustainable Finance Strategy and will be consulted on the Draft Delegated Act once it will be published ahead of its expected adoption in Q4.
HERE more information.
Read HERE the EOS answer to the Consultation.
Deadline for responding : 27 April 2020