EU sustainability taxonomy

The European Green Deal has established climate and energy targets for 2030. The European Union (EU) has established a common classification system for activities related to sustainability. This taxonomy provides definitions for environmentally sustainable economic activities to companies, investors, and policymakers. EU taxonomy is expected to become a bigger issue to deal with than ESG, as it is a regulation that will impact 50,000 companies and every supplier to these companies.

The EU taxonomy regulation has identified six environmental objectives as follows:

• Climate change mitigation
• Climate change adaptation
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystem

The Technical Expert Group (TEG) on sustainable finance has developed recommendations for technical screening criteria...