The EU regulation on the establishment of a framework to facilitate sustainable investment (the "Taxonomy Regulation") was published in the Official Journal on 22 June 2020. The Taxonomy Regulation establishes a classification system (or taxonomy) to provide businesses with a common language to identify whether a given economic activity should be considered "environmentally sustainable" and to determine to which extent an investment should be deemed environmentally sustainable or "green".
The Taxonomy Regulation empowers the Commission to adopt delegated acts to specify how competent authorities and market participants shall comply with its obligations, more specifically:
- a delegated act on the technical screening criteria for economic activities that make a significant contribution to climate change mitigation and climate change adaptation (the "Climate Delegated Act")
- a delegated act supplementing Article 8 of the Taxonomy Regulation, specifying the content, methodology and presentation of information to be disclosed by both financial and non-financial undertakings concerning the proportion of environmentally sustainable economic activities in their business, investments or lending activities (the "Article 8 Disclosures Delegated Act")
- a delegated act on technical screening criteria for economic activities that make a significant contribution to (a) the sustainable use and protection of water and marine resources, (b) the transition to a circular economy, (c) pollution prevention and control, or (d) the protection and restoration of biodiversity and ecosystems (the "Environmental Delegated Act")
The Climate Delegated Act was formally adopted on 4 June 2021 for scrutiny by the co-legislators. The Article 8 Disclosures Delegated Act was adopted by the Commission on 6 July 2021 for scrutiny by the co-legislators.
Read the full newsflash summarising the main changes introduced by the Circular.