FIN.

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.

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Roseyna Jahangir