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EU Taxonomy: Call for feedback on new environmental criteria

AUTHORS: Ben Allen – Nora Hiller

New technical screening criteria for Biodiversity, Water, Pollution, Circular Economy to guide private investments are out for review under the EU Taxonomy framework.

On 3 August, the Platform on Sustainable Finance has released its draft report outlining new technical screening criteria for all six of the environmental objectives of the Taxonomy Regulation. A call for feedback is asking the public to provide vital input to strengthen the sustainability criteria which will guide private investments to achieve the European Green Deal objectives.

The Commission’s sustainable finance package, which includes the Taxonomy, includes policy-decisions about several large-scale environmental issues, that are essential to support bridging the €260bn investment gap by 2030 to address environmental challenges.

The EU Taxonomy creates a common language between issuers, investors and policymakers to understand and deliver sustainability through private finance. By applying reporting requirements against technical screening criteria, the Taxonomy creates transparency and clarity on the sustainability of investments. As funders are increasingly looking for genuine sustainable investment opportunities, the additional criteria will provide greater chances for companies and financial actors to attract green financing.

Starting in October 2020, the Platform on Sustainable Finance was tasked with delivering independent advice to the European Commission through gathering and coordinating input from external experts from the public and private sectors. A sub-group of the Platform, the Technical Working Group (TWG), worked on developing technical screening criteria which determine if an economic activity is sustainable. Alongside Marzia Traverso (rapporteur for the TWG), IEEP’s Research Director Dr Ben Allen acts as co-rapporteur of the group – see the structure of the Platform here.

The report and its annex, which outline the draft technical screening criteria, are now open for consultation for the public. It outlines the Platform’s view on how different economic activities can make a substantial contribution to:

• biodiversity and ecosystems,
• pollution prevention and control,
• sustainable use and protection of water and marine resources,
• transition to a circular economy,
• alongside additional activities focussed on climate change mitigation and adaptation.

The documents condense a huge amount of effort and commitment from the Technical Working Group, invited experts, and wider Platform, as well as the Commission secretariat and support staff. It is also a significant milestone as we move towards a clearer definition of sustainable finance in the EU. Both the report and the call for feedback, as well as a webinar explaining the work, with the Platform Chair Nathan Fabian, and both rapporteurs, are available on the Commission’s website.

The call for feedback closes on 24 September 2021. Until the end of September, you can provide feedback on the overall report and the criteria to strengthen the Platform on Sustainable Finance’s recommendations for the final report to the Commission, due later this year.

© Photo by Noah Buscher on Unsplash

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