EU Taxonomy

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Sustainability - European Union - European Commission.

The EU Taxonomy is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy.

The Taxonomy sets performance thresholds (referred to as ‘technical screening criteria’) for economic activities which:

  • Make a substantive contribution to one of six environmental objectives (below).
  • Do no significant harm (DNSH) to the other five, where relevant.
  • Meet minimum safeguards (for example, the OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights).

Environmental objectives of the EU Taxonomy:

  • Climate change mitigation.
  • Climate change adaptation.
  • Sustainable use and protection of water and marine resources.
  • Transition to a circular economy.
  • Pollution prevention and control.
  • Protection and restoration of biodiversity and ecosystems.

Under the EU Taxonomy, three different types of activity are recognised as "environmentally sustainable":

(1) Activities that make a substantial direct contribution to one or more of the environmental objectives noted above.

(2) Transitional activities, acting as an appropriate stepping stone.

(3) Appropriate enabling activities.

See also