The EU Sustainable Taxonomy is an important market transparency tool, operating as a classification system that defines criteria for economic activities that are aligned with the climate and energy targets for 2030 and the European green deal. To this end, EU Taxonomy clearly defines what is sustainable economic activity, protecting financial and non-financial companies from greenwashing and allowing them to direct investments to activities commonly understood as sustainable.

However, the Taxonomy has so far not envisaged restrictions in connection to economic activity (e.g., capital requirements), nor incentives. The focus in rather on the firm’s impact on sustainability goals. The final text included some controversial activities as sustainable economic activities, such as nuclear energy or gas, but has not (yet) included activities such as chemicals, automotives, or mechanical engineering.

Following Commission proposal and final agreement between the co-legislators, the Taxonomy regulation entered into force in July 2020 and has, since then, been supplemented with delegated acts several times. Deutsche Börse Group welcomed a common classification system and reiterated the need for global interoperability between Sustainable Taxonomy systems that would avoid creating an uneven playing field.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.