The Regulation on the establishment of a framework to facilitate sustainable investment is at the heart of the Sustainable Finance Action Plan. Parliament and Council will now need a common agreement.
On September the 25 the Council of the European Union agreed on a position on a unified EU classification system for sustainable activities, the so-called EU Taxonomy.
When turned into Regulation, most likely in 2020, the Taxonomy will serve a double purpose: in the medium term, it will clarify which economic activities can be considered sustainable, reducing market fragmentation and avoiding greenwashing. In the log-term, the taxonomy will be a driver for institutional capitals into sustainable investments, unlocking, according to Commission estimations, EUR 175 billion per year to help the European economy in its transition.
Valdis Dombrovskis, Vice-President in the current commission and designated as Executive Vice President for an Economy that Works for People, declared: " Public money alone will not be enough to make the European economy climate neutral by 2050. Today's agreement by the Member States is an important first step. I now hope that the co-legislators will quickly agree on an ambitious package that reflects the EU's ambition to carry out work on sustainable finance”.
EU Parliament and Council will now have to find a common agreement to pass this Regulation, which will be integrated by the report Technical Expert Group, which defines the technical screening criteria and will be updated in 2021 and 2022.
In the EU Issue Insight of June, CSR Europe informed its members about these developments in sustainable finance. Interested companies, however, can also register to participate in the Technical Workshop “Managing Corporate Climate Impact”, co-hosted with European Investment Bank (EIB) in Paris. Members will have the opportunity to hear from experts on how to improve the management and reporting on climate-related risks, defining main issues and best practices.