What does the EU taxonomy mean?
The EU taxonomy provides an overview of what can be considered sustainable activities. What criteria are used to determine this and which are covered by the taxonomy? We'll give you the answer.
The taxonomy is the EU classification tool for determining which economic activities can be counted as sustainable and contribute to a green transition in Europe.
Taxonomy is another word for classifying or systematizing information. In other words, a taxonomy organizes large amounts of information. Parts of speech are an example of a taxonomy: it organizes all the words in our language by grouping them as nouns, verbs, pronouns, and so on.
When it comes to promoting green change, EU experts needed such a scheme to accelerate the green transition. In order for society to develop towards a more sustainable direction, we must ensure that the investments made by authorities and financial actors contribute to this goal. To achieve this, we need to agree on what is really more sustainable, so that it is not up to everyone to decide. A common overview makes it easier for everyone to work towards the same goal – towards a low-carbon society, a circular economy and an environment free of environmental toxins.
The taxonomy's "place" in the EU Green Deal
The EU Green Deal is a comprehensive strategy that guides how Europe will become a more sustainable region, by 2050. The action plan for a more sustainable financial industry is a central part of this Green Deal and the taxonomy is the very basis for this.
The EU taxonomy for sustainable activities is formally a regulation – a piece of legislation. It defines which economic activities we should consider sustainable and will contribute to increased private investment in economic activities that promote the green transition in Europe.