EC sustainable finance classification system to be developed

The Council of the European Union has agreed a position on the proposed EU-wide sustainable finance taxonomy regulation.  This would develop a common language for assessing what economic activities can be considered environmentally sustainable, thereby reducing fragmentation from market-based initiatives and varying national practices, and reduce misleading marketing of financial products, or ‘greenwashing’.

The environmental objectives identified in the proposal are:

  • climate change mitigation
  • climate change adaption
  • sustainable use and protection of water and marine resources
  • transition to a circular economy, including waste prevention and recycling
  • pollution prevention and control; and
  • protection and restoration of biodiversity and ecosystems.

It is propose that the taxonomy should be agreed by the end of 2021, and in full application by the end of 2022.


Roseyna Jahangir