Brussels – The European Commission’s Technical Expert Group on sustainable finance has released a new report on a taxonomy of sustainable activities, to support the proposed establishment of a framework to facilitate sustainable investment.
The taxonomy contains a list of economic activities, with performance criteria for how they can contribute to six environmental objectives:
- Climate change mitigation;
- Climate change adaptation;
- Sustainable use and protection of water and marine resources;
- Transition to a circular economy, waste prevention and recycling;
- Pollution prevention and control;
- Protection of healthy ecosystems.
The aim is to facilitate the identification of environmentally beneficial investments, so that investors and fund managers can be certain that their investments are contributing to EU goals. The taxonomy covers seven key areas: agriculture and forestry; manufacturing; electricity, gas, steam and air conditioning supply; water, sewerage, waste and remediation; transport; ICT; and buildings.
Whilst many investment funds have indicated their intention to invest in environmentally positive activities, uncertainty regarding impact remains a key barrier. By providing a common language for investors, it is hoped that they can make informed decisions, whilst also avoiding greenwashing.