🌍 EU Taxonomy – sustainable investing
EU Taxonomy: The Gold Standard for Sustainable Finance & Green Investments
What is the EU Taxonomy?
The EU Taxonomy is a classification system developed by the European Union (EU) to define sustainable economic activity. It helps investors, companies, and policymakers identify businesses that contribute to climate and environmental goals, ensuring transparency in sustainable finance.
Why is the EU Taxonomy Important?
✅ Standardized ESG Reporting – Ensures a common definition of sustainability across industries.
✅ Investor Confidence – Helps financial markets identify truly sustainable investments.
✅ Regulatory Compliance – Supports EU regulations like the Sustainable Finance Disclosure Regulation (SFDR).
✅ Encourages Green Transition – Directs capital towards sustainable projects.
Key Criteria for EU Taxonomy Alignment
To be considered environmentally sustainable, an economic activity must:
1️⃣ Make a Substantial Contribution to at least one of the six environmental objectives:
- Climate Change Mitigation
- Climate Change Adaptation
- Sustainable Use of Water Resources
- Transition to a Circular Economy
- Pollution Prevention & Control
- Protection of Biodiversity & Ecosystems
2️⃣ Do No Significant Harm (DNSH) – The activity must not harm any of the six objectives.
3️⃣ Comply with Minimum Social Safeguards – Align with human rights and labor standards.
Who Needs to Comply with the EU Taxonomy?
- Large EU-listed companies under the Corporate Sustainability Reporting Directive (CSRD).
- Financial institutions offering green investment products.
- Investors looking to ensure alignment with sustainable investment criteria.
📚 Learn More About the EU Taxonomy
Understanding the EU Taxonomy Framework
- How the six environmental objectives shape sustainable investments.
- How companies can ensure Taxonomy alignment in their financial disclosures.
- How the EU Green Bond Standard is linked to the Taxonomy.