Negotiations between the European Parliament and Council have reached agreement on environmental objectives for determining the sustainability of an economic activity.
The Commission proposal for a ‘taxonomy regulation’ stipulates the following objectives:
- climate change mitigation;
- climate change adaptation;
- sustainable use and protection of water and marine resources;
- transition to a circular economy, waste prevention and recycling;
- pollution prevention and control;
- protection of healthy ecosystems.
It also further defines the criteria for a substantial contribution to each environmental objective.
The agreement must next be signed off by the two relevant committees, and then put to a plenary vote. It will then contribute to establishing a transparent and consistent framework for assessing the sustainability (or otherwise) of financial products and mitigating the risk of ‘greenwashing’.