AUTHOR: Ben Allen and Nora Hiller
In this blog for IEEP’s 50th anniversary, Dr Ben Allen, former IEEP Executive Director and now lead expert on nature and environment for the PRI, and Nora Hiller, Senior Policy Analyst at IEEP, reflect on the importance of the design of sustainability criteria, the framework conditions for aligning economic activity with environmental and social objectives in the EU, and how IEEP helped to shape this landscape.
Sustainability criteria are often treated as niche technical instruments: rules to define what counts as sustainable, and benchmarks to measure progress. But they are much more than administrative tools to put guardrails around business. Used well, sustainability criteria outline the framework for societal goals in a clear, credible and actionable way. They can shape markets, guide investment and innovation, build trust and signal the direction of travel to policymakers, companies and civil society alike. Yet, used badly, they can create perverse incentives, encourage box-ticking and undermine our confidence in the wider economic, social and environmental transition.
When I, Ben, joined IEEP as an analyst in 2010, the EU’s biofuels policy discussions were entering a new phase. I was, at this point, dividing my time between working on renewable energy projects and working on agri-enviornment and land use projects. Those two worlds would quickly collide as the indirect land use change (ILUC) debate was about to start in earnest, and IEEP’s ag team – widely regarded as some of the leading thinkers on EU agriculture policy – would bridge into areas of bioenergy, bioresources, renewable energy, and the bioeconomy through the lens of sustainability criteria related to land use.
At their core, sustainability criteria support our understanding of how to frame whether an economic activity is acceptable in relation to environmental and/or social outcomes, such as the 2040 EU Climate Targets or the Paris Climate Agreement. In this context IEEP began a body of work at the EU level, that would, over the next decade, provide a substantial contribution to field building in this area, and lay out the groundwork for how sustainability criteria related to environmental objectives were defined. This included developing methodologies and criteria for assessing the sustainability of wastes and residues in the context of ILUC; land use mapping criteria, including to assess voluntary schemes and standards; how to design a land use, land use change and forestry pillar to support forest and climate goals; and the development of sustainability criteria to avoid carbon debt, land use change and negative impacts on environment and climate goals (see report here and here), amongst many others.
By 2020, IEEP had compiled a significant body of work in this space, and we could see our hand in the EU’s renewable energy and bioeconomy policy files, but the real work was about to begin. From a corner of the EU policy landscape that didn’t really feature on the radar of environmental policymakers, came the ‘EU Taxonomy Regulation’. Whether this naming was deliberate, so as to smooth its entry into force, or just an artefact of it being a technical area of policy, we may never know. But the landscape around sustainability criteria was about to change. This regulation would establish the basis for the EU Taxonomy by setting out the four overarching conditions that an economic activity has to meet to qualify as environmentally sustainable.
For IEEP, this was a key moment. This could be the framework that would guide all economic activities through a sustainability lens. The Taxonomy Regulation required the establishment of the Platform on Sustainable Finance. A group of 50 experts to advise the European Commission on the development of robust and science-based technical screening criteria (or sustainability criteria) for the EU Taxonomy, and policy development, amongst other things. IEEP applied and was selected to be a member representing academia, research institutes and think tanks. In this process I was selected to be the co-rapporteur of the technical working group, with Nora supporting me and engaging across other working groups. Our term would last two years, and our main responsibility was to support the development of criteria for biodiversity protection, water use, pollution control and circular economy. Criteria for climate had already been developed by a technical expert group in the years leading up to this.
This work started when the green wave of EU policy felt like it was still rising and ambition could be set high. However, it was not long before word got out that this obscure piece of the EU policy framework could impact corporates, financial institutions and even countries. This drew enormous attention to what was increasingly being seen as a ‘green list’, that if you were in, you were sustainable, and if you were out, you were unsustainable and uninvestible. This was never the case in practice, but EU policymaking being what it is, it drew political attention. Pressure to include gas and nuclear within the list of activities grew, and how to address agriculture, aviation, forestry and mining, were daily conversations.
In 2022, the technical working group published our recommendations to the Commission, with criteria established for over 50 different economic activities, from agriculture to waste management, civil engineering to chemical manufacturing. The wider working groups delivered recommendations on transition taxonomy, minimum safeguards on social issues, and usability. This was a huge achievement, and all organisations involved had devoted enormous time and effort to getting to this point. Ultimately, our role was to recommend, not decide.
Yet the environment in which we started this endeavor had changed, and continues to change. Whilst by 2023 we saw many of our proposed criteria enter into Delegated Acts (with some amendments and omissions), as of today (2026) a Delegated Act has entered into force under the Commission’s Omnibus, with reduced scope, streamlined reporting templates and simplified ‘Do no significant harm criteria’. This risks reducing the clarity needed to guide economic actors in their decisions, and the rigour needed to ensure substantial contribution to environmental goals that underpin our economy and society. A point reinforced this month in the CBD secretariat’s draft review of progress on global biodiversity goals “further strengthening regulatory frameworks, taxonomies and disclosure systems could help mobilize private finance”.
Until such time that we can appropriately price in the negative impacts and costs to the environment and society into financial decisions, sustainability criteria will remain important to guide economic actors in their choices. Designing them well, to be usable, allow innovation and drive sustainable growth, whilst not undermining the very nature systems on which our economy relies, is the goal. It is in these spaces that IEEP continues to play one of its most important roles, as a neutral, evidence-based convenor in pursuit of the advancement of EU environmental policy.
Blog photo by Julian Hochgesang on Unsplash
Dr Ben Allen is the UN Principles for Responsible Investment’s lead expert on nature and environment. He joined the PRI as Director of ESG Issues in 2023. He was Executive Director of IEEP (2021 – 2022) and prior to that, Research Director. He has been a contracted expert to the United Nations Environment Programme, and served as a member of the EU’s platform on sustainable finance in the role of co-rapporteur of the technical working group (2020 – 2022). His work focuses on the advancement and inclusion of systemic sustainability issues within financial decision making.
Nora Hiller joined IEEP in 2019 and is a Senior Policy Analyst in IEEP’s Nature & Food Systems team. Her research focuses on measuring and lowering the biodiversity and climate impact of companies and financial institutions in agri-food value chains. Throughout Nora’s time at IEEP, she worked with EU institutions and stakeholders to advance agricultural Research & Innovation, mainstream the SDGs, and develop sustainability criteria for sustainable finance. Prior to joining IEEP, she supported the GIZ’s Climate Finance unit and holds a MSc in Environment and Development from the University of Edinburgh.
