EU taxonomy for sustainable activities (2024)

FAQs

What is the EU classification for sustainable activities? ›

The EU taxonomy is a cornerstone of the EU's sustainable finance framework and an important market transparency tool.

(ii) When is an economic activity considered to be "environmentally sustainable"? Where it: contributes substantially to any of a series of defined environmental objectives; doesn't significantly harm any of the environmental objectives; complies with a series of minimum social safeguards; and.

What is the EU Taxonomy? The EU Taxonomy is a classification system that helps companies and investors identify “environmentally sustainable” economic activities to make sustainable investment decisions.

How does the EU Taxonomy work? 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.

However, companies of any size can use the EU Taxonomy on a voluntary basis to show investors and stakeholders in general whether they are carrying out or planning sustainable activities. Disclosure on the EU Taxonomy is only mandatory for companies that fall within the scope of the NFRD/CSRD.

The EU taxonomy is part of the EU's overall efforts to reach the objectives of the European Green Deal.

A green taxonomy is a framework for defining what can be called environmentally sustainable investments. In addition to tackling “greenwashing”, a green taxonomy can help companies and investors make more informed choices. Sustainability is a key feature of today's global corporate culture.

They have appeared in South Africa, Colombia, South Korea, Thailand, Singapore, and Mexico, amongst other countries.. Many countries , including India, are in the process of developing their own taxonomy.

What is the EU definition of sustainability? ›

Sustainable development means meeting the needs of the present whilst ensuring future generations can meet their own needs. It has three pillars: economic, environmental and social. To achieve sustainable development, policies in these three areas have to work together and support each other.

The four main criteria for sustainability: environmental, economic, social, and technical sustainability.

The six environmental objectives of the Taxonomy are: (1) climate change mitigation, (2) climate change adaptation, (3) sustainable use and protection of water and marine resources, (4) transition to a circular economy, (5) pollution prevention and control, and (6) protection and restoration of biodiversity and ...

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.

‍Eligible activity/Eligibility: an economic activity that is described and has technical screening criteria set out in the taxonomy. Such an activity is 'eligible' under the taxonomy and all revenue, CAPEX and OPEX for this economic activity is therefore taxonomy eligible.

The term sustainability is broadly used to indicate programs, initiatives and actions aimed at the preservation of a particular resource. However, it actually refers to four distinct areas: human, social, economic and environmental – known as the four pillars of sustainability.

EU law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.