EU taxonomy for sustainable activities (2024)

FAQs

What is the EU Taxonomy for environmentally sustainable activities? ›

The EU Taxonomy is centered around six environmental objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.

For financial products that do not do not consider the EU criteria for environmentally sustainable economic activities, the entity must make this statement in its disclosure. This is known as Article 7 Taxonomy disclosure.

The EU Taxonomy is not a mandatory list for investors to invest in.

The EU developed the taxonomy to provide well-defined, harmonised criteria for when economic activities can be considered to be sustainable. It sets out robust, science-based technical screening criteria that activities need to comply with to be seen as green.

The EU taxonomy of sustainable economic activities is a tool to help investors understand whether an economic activity is environmentally sustainable and navigate the transition to a low-carbon economy.

The Article 8 disclosure obligation requires In-scope Entities to include information on how and to what extent their activities are associated with taxonomy-aligned economic activities in their non-financial statements or consolidated non-financial statements.

Article 17 TR sets out situations where an economic activity could be considered as significantly harmful to the EU Taxonomy environmental objectives and specifies that this assessment should be carried out taking into account “the environmental impact of the activity itself and the environmental impact of the products ...

Article 7.2: In the event of a "serious and persistent breach" (i.e. the country does not heed the Council's guidance) then the Commission or one-third of countries, approved by a two-thirds majority in Parliament, calls the country to answer to the European Council again.

Overview. The Ecodesign for Sustainable Products Regulation (ESPR), which entered into force on 18 July 2024, is the cornerstone of the Commission's approach to more environmentally sustainable and circular products. Products and the way we use them can have a significant impact on the environment.

What are enabling activities in EU taxonomy? ›

Enabling economic activities are a sub-category of environmentally sustainable economic activities under the Taxonomy Regulation, which do not substantially contribute to climate change mitigation through their own performance.

Since the EU Taxonomy came into force, it has faced criticism due to its limitations, the designation of certain activities, and even whether legislation should play a role in accelerating the transition of capital markets towards a sustainable economy.

Under the Taxonomy Regulation, the European Commission (the “Commission”) is responsible for defining technical screening criteria for each environmental objective through delegated and implementing acts. The Taxonomy Climate Delegated Act applied from 1 January 2022.

The EU Taxonomy defines economic activities that can be considered environmentally sustainable. The CSRD requires companies to report on their sustainability performance against the EU Taxonomy. The SFDR requires financial market participants to disclose how their products align with the EU Taxonomy.

Economic activity 3.6 „Manufacture of other low carbon technologies“ The activity description “3.6 Manufacture of other low carbon technologies” is of particular relevance to the Dürr Group. Due to the generic description of this economic activity, it is necessary to describe our interpretation in greater detail.

The Green Asset Ratio (GAR) is in principle a simple ratio quantifying EU Taxonomy-aligned assets as a percentage of total covered assets. However due to its structure and constrained coverage it has a very limited information value.