The NFRD at present applies to large public interest entities (PIEs)) – which can include organisations in the financial and non-financial sectors. On 12 July 2020, Regulation (EU) 2020/852 (the Taxonomy Regulation) came into force, bringing with it an exhaustive list of environmental objectives being: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; The Taxonomy Regulation does not require parties to invest in taxonomy-eligible activities. März 2020 20. Seit Juli 2018 arbeitete eine Sachverständigengruppe der … 10 June 2020 The introduction of the EU Taxonomy is getting closer and the impact will be significant * To directly request the webinar recordings, click here. The EU taxonomy is designed to combat greenwash and help everyone identify what is or is not sustainable. The report contains recommendations relating to the overarching design of the EU Taxonomy, as well as extensive implementation guidance on how companies and financial institutions can use and disclose against the taxonomy. ECOS has joined 130 NGOs and experts who are sounding the alarm on the EU’s green finance rules, the ‘Taxonomy’, and calling for them to be rooted in science – led by WWF. Within the framework of the Taxonomy Regulation, the TEG has been asked to develop recommendations for technical screening criteria for economic activities that can make a substantial contribution to climate change mitigation or adaptation, while avoiding significant harm to the four other environmental objectives: sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention control, and protection and restoration of biodiversity and ecosystems. Summary of the EU Taxonomy that was Launched in 2020 The European Commission established a Technical Expert Group (TEG) on sustainable finance midway through 2018, tasked to advise with a range of policy reforms. In June 2020 the EU published Regulation 2020/852 (“EU-Taxonomy Regulation”) which fundamentally transforms the European regulatory landscape with regards to mandatory non-financial reporting requirements of companies and other financial market participants. I will shed light on the design, advantage and challenges of the taxonomy. These criteria will be established through delegated acts. You can browse, search or filter our publications, seminars and webinars, multimedia and collections of curated content from across our global network. The EU Taxonomy was … The TEG published the first set of climate change mitigation activities with associated technical screening criteria in December 2018. Browse and register for our upcoming events and explore materials from past events. But what is the EU Taxonomy, exactly? Legislative proposal – linking actors from finance across sectors . The TR sets out the framework and environmental objectives for the Taxonomy, as well as new legal obligations for financial market participants, large companies, the EU … It also clarifies that this delegated act is separate from the other delegated act needed under the Taxonomy Regulation to implement the TSC, and that it will complement the wider NFRD review (mentioned above). This so-called ‘EU Taxonomy for green investments’ is a regulation approved by the European Parliament and the EU Council in December that establishes the criteria for determining whether an economic activity (for example a manufacturing company) and any investment products associated to it (for example shares of corporate bonds) can be classified as environmentally sustainable. To help you navigate regulatory requirements across regions, we have collated a range of key cross-border content. What investors need to know now and how ISS ESG can help them implement it. for those products that do not invest in taxonomy-compliant activities, a statement that they do not take into account the EU taxonomy. But a word of warning: the TSC are not for the faint hearted. comply with technical screening criteria to be adopted under the Regulation (see below). The Taxonomy Regulation tasks the Commission with establishing the actual list of environmentally sustainable activities by defining technical screening criteria for each environmental objective. The JRC will submit a technical report on the “do no significant harm” aspects of nuclear energy in 2021. On 22 June 2020, the Taxonomy Regulation was published in the Official Journal of the European Union and entered into force on 12 July 2020. Prior to this regulation there was no harmonised standard in Europe to classify green investments. Contract lawyers from Linklaters, consultation on an inception impact assessment. This will be done through delegated acts. The Taxonomy Regulation sets out an EU-wide framework (a classification system known as a “taxonomy”) according to which investors and businesses can assess whether certain economic activities are “sustainable”. März 2020. An updated methodology section to support the recommendations on the technical screening criteria. EU Taxonomy delivering for the economy and environment. One year after the initial report, the European Parliament and European Council adopted the Taxonomy Regulation in December 2019. The delegated acts for the TSC for the remaining four environmental objectives (water, circular economy, pollution control and biodiversity) must be adopted by 31 December 2021 so that the taxonomy can start to apply to those objectives from 1 January 2023. On June 18, 2020 the EU Taxonomy Regulation was made official, starting a new era of sustainable financial regulations. The ultimate aim is to encourage investment flows from the financial sector to companies engaged in or transitioning to more sustainable activities so that the EU can become carbon neutral by 2050 and meet its climate change goals. They proposed a ‘Climate Law’ to achieve their aims, leading to an updated report in March 2020. After a second round of feedback, the TEG released its final version of the EU Taxonomy on Sustainable Finance in March 2020. Organisations covered by the Non-Financial Reporting Directive (see below). What is the aim of the Taxonomy Regulation? However, the Commission is currently carrying out a wider review of the NFRD and one of the issues being considered is whether the NFRD should be extended to cover other types of companies. However, it will not start applying in practice until 1 January 2022 at the earliest. During its mandate, the TEG also engaged with over 200 additional experts to develop their recommendations for the technical screening criteria. For more information on the wider NFRD review, see our blog post: Non-Financial Reporting Directive: the pursuit of data that is relevant, reliable and comparable. The report contains recommendations relating to the overarching design of the EU taxonomy, as well as extensive implementation guidance on how companies and financial institutions can use and disclose against the taxonomy. Ten areas range from fossil fuels, bioenergy and hydropower to livestock and hydrogen. This Consultation Paper may be of particular interest to non-financial undertakings and asset managers covered by Article 8 of Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’) as well as to investors and other users of non-financial information. On 22 June 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (widely referred to as the Taxonomy Regulation) was published in the Official Journal of the EU, marking a significant step in the realisation of the European Commission's Action Plan on Financing Sustainable Growth (the EU Action Plan). On 15 April 2020 the Council adopted by written procedure its position at first reading with respect to the Taxonomy regulation. Updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria f… 16 December 2020. On 9 March 2020, the TEG published its final report on EU taxonomy. To begin with, the taxonomy will therefore only apply to certain stakeholders in the market, but we expect it to become the dictionary for financial services and business activities more broadly in due course (either due to legal or market intervention). In July 2020, the Commission published a consultation on an inception impact assessment (also known as a “roadmap”) on the delegated act needed under Article 8. Welcome to the Knowledge Portal. Sustainable Finance - Sustainable finance, Partner, Global Head of Environment & Climate Change / London, Environment & Climate Change Managing Associate / London, European Commission consults on draft EU taxonomy delegated act for climate change mitigation and adaptation. We would advise you pour yourself a large glass of your favourite tipple and wrap a nicely chilled towel around your head before delving into that detail. Ökologische Nachhaltigkeit aus Sicht der EU-Regulierung. Proponents argue that it should be included because it is a low-carbon source of energy, whilst critics claim the problems associated with radioactive waste mean it does not meet the “do no significant harm” principle under the Regulation. A … There are four tests that an economic activity must satisfy to be “environmentally sustainable” under the taxonomy. Nachhaltige Finanzen: Experten legen Berichte zur „grünen Liste“ und zum EU-Standard für grüne Anleihen vor Der heutige Expertenbericht über die Taxonomie enthält Empfehlungen zur Gestaltung der „grünen Liste“ der EU, einschließlich einer Anleitung, wie Unternehmen und Finanzdienstleister sie … An inception impact assessment was published for feedback in July 2020. … Current status of the EU TEG and Sustainable Finance Taxonomy (‘EU Taxonomy’) We recommend the taxonomy be based on the 2020 update to the EU Code of Conduct and that changes only be reconsidered when the taxonomy is updated by the Commission. An idea first pitched by the High Level Expert Group (HLEG) on Sustainable Finance – appointed by the European Commission in 2016 to advise on ‘greening’ financial markets – the EU Taxonomy was approved by the European Parliament in June of this year. OVERVIEW . The delegated acts for the TSC for the first two environmental objectives (climate change adaptation and climate change mitigation) must be adopted by 31 December 2020 so that the taxonomy can start to apply from 1 January 2022 to those two environmental objectives. The Commission will adopt a delegated act by June 2021 specifying the information companies subject to the non-financial reporting directive will have to disclose on how, and to what extent, their activities align with those considered environmentally sustainable in the Taxonomy. Die EU-Taxonomie legt Kriterien für klimaverträgliche Investments fest. For the four other environmental objectives, the taxonomy should be established by the end of 2021 and will apply by the end of 2022. The final report on EU taxonomy, developed by the Technical Expert Group (TEG) on Sustainable Finance, contains recommendations relating to the overarching design of the Taxonomy, as well as guidance on how companies and financial institutions can make disclosures using the taxonomy. The European Commission said in an FAQ that we can expect a consultation on the draft delegated act for the climate TSC in September/October 2020. For more information on the Disclosure Regulation, see our publication: ESG Disclosure Regulation. The TEG’s recommendations are designed to support the European Commission in the development of the delegated act on climate change mitigation and climate change adaptation under the Taxonomy Regulation. It directly affects all regulations i… Brussels, 14 December 2020. Die EU-Taxonomie ist auf den am 8. The Taxonomy Regulation was published in the Official Journal of the EU on 22 June 2020 and entered into force on 12 July 2020. Diese Plattform wird in den kommenden Jahren eine entscheidende Rolle für die Weiterentwicklung der EU-Taxonomie und unserer Strategie für ein nachhaltiges Finanzwesen spielen.“ Bewerbungen für die Plattform für ein nachhaltiges Finanzwesen können vier Wochen lang eingereicht werden. 2020-03-09T13:12:00+00:00. The EU Taxonomy is a noteworthy milestone that sets a common language for collaboration in sustainable finance. The initial focus has been on defining what is sustainable in climate terms but the intention is to come up with rules on other environmental sustainability objectives, and to extend this to social objectives at a later stage. II (Non-legislative acts) REGULATIONS COMMISSION DELEGATED REGULATION (EU) 2020/1989 of 6 November 2020 amending Delegated Regulation (EU) 2019/815 as regards the 2020 update of t The activity must: The Regulation sets out six environmental objectives: The Commission needs to adopt technical screening criteria (TSC) for each of the six environmental objectives, fleshing out in detail what it means for an economic activity to substantially contribute to an environmental objective. EU taxonomy could deliver breakthrough in sustainable finance – researchers . Die RTS referenzieren u. a. auf den technischen Bericht und seinen 593 Seiten umfassenden Anhang der TEG (Technical Expert Group) – häufig EU-Taxonomie genannt – vom 9. Posted on 15 December 2020. The framework may seem overwhelming, which is why we have broken it down into a short and digestible guide, covering the EU Taxonomy on a basic level, summarizing the most important key takeaways of the framework. What is … Adopted by the Council of the EU on April 15, 2020, with specific criteria being developed throughout 2020 and 2021, the “EU Taxonomy” aims to provide a unified classification system for “green” and “sustainable” economic activities under the EU’s sustainable finance regulations. Verordnung (EU) Nr. However, it will not start applying in practice until 1 January 2022 at the earliest. EU Taxonomy by applying the methodology of the Draft of the Technical Expert Group on Sustainable Finance. 16 December 2020 The EU taxonomy: a missed opportunity to grasp the potential of the ICT sector DIGITALEUROPE comments on taxonomy delegated act Digital has enormous enabling potential to facilitate the EU’s transition to a low carbon circular economy. On 9 March 2020, the TEG published its final report on EU taxonomy. In March 2018, the European Commission presented an action plan on sustainable finance, in order to facilitate investments in sustainable projects and assets across the EU. Article 27 states that the reporting requirements in Article 8 should apply: However, it is still not clear whether this means that the disclosure obligations in Article 8 will apply, in respect of the first two environmental objectives (climate change adaptation and mitigation), to financial years commencing on 1 January 2022 or to reports published after 1 January 2022. Member states and EU institutions when setting rules about financial products and corporate bonds that are made available as environmentally sustainable – so the taxonomy will be used to define green bond standards in due course; Financial market participants (FMPs) who offer financial products and market these as environmentally sustainable (see below) - as noted below, the definition of FMPs captures primarily buyside firms and institutional investors; and. In addition, the Technical Expert Group defined the technical criteria for the first two objectives (climate), which will be adopted through delegated acts by the European Commission by 31 December 2020. information on how, and to what extent, the investments that underlie their financial product support economic activities that meet the four tests for environmental sustainability under the Taxonomy Regulation, or. To help you stay up-to-date with key regulatory developments in a time of accelerating change, we have collated a range of crucial horizon scanning content. The list of economic activities and performance thresholds will be issued as part of the explicit legal requirements from the European Commission by the end of 2020. from 1 January 2022, as regards the first two environmental objectives; and. The Taxonomy Regulation amends the Disclosure Regulation to require “financial market participants” (FMPs) to disclose, either: It also amends the Disclosure Regulation to require the European Supervisory Authorities (i.e. The Taxonomy Regulation (TR), agreed at the political level in December 2019, creates a legal basis for the EU Taxonomy. And in order to do that, the EU needs investors to redirect a vast amount of capital into the right type of projects and companies. For this COP, all countries must review their Nationally Determined Contributions (NDCs) and submit mid-century decarbonisation plans in line with their commitments under the Paris Agreement. This site is managed by the Directorate-General for Communication, Final report of the TEG on the EU taxonomy, action plan on financing sustainable growth, proposal for a regulation on the establishment of a framework to facilitate sustainable investment, political agreement on the Taxonomy Regulation, adopted by written procedure its position at first reading with respect to the Taxonomy regulation, Technical Expert Group (TEG) on sustainable finance, excel tools to help users of the Taxonomy to implement it in their own activities, early feedback report published in December 2018, responses to the second round of feedback on the June 2019 report, joint document with frequently asked questions, is currently subject to stakeholder feedback for a period of four weeks, Commission also requested advice from the European Supervisory Authorities, Press release on the draft delegated act - 20 November 2020, Text and annexes of the draft delegated act, Give us your feedback on the draft delegated act, Press release on the final report on EU taxonomy, Technical annex to the final report on EU taxonomy, Text of the political agreement reached by the European Parliament and the Council on 18 December 2019, Council adopts the first reading position on 15 April 2020, Technical expert group on sustainable finance (TEG), Aid, Development cooperation, Fundamental rights, Follow the European Commission on social media. 18.12.2020 hydropower is not a sustainable investment year to prepare for it in to! 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