On 15 April 2020 the European Council adopted by written procedure its position at first reading with respect to the Taxonomy regulation. For the four other environmental objectives, the taxonomy should be established by the end of 2021 and will apply by the end of 2022. These criteria will be established through delegated acts. from 1 January 2022, as regards the first two environmental objectives; and. The Taxonomy Regulation sets out an EU-wide framework (a classification system known as a “taxonomy”) according to which investors and businesses can assess whether certain economic activities are “sustainable”. Article 27 states that the reporting requirements in Article 8 should apply: However, it is still not clear whether this means that the disclosure obligations in Article 8 will apply, in respect of the first two environmental objectives (climate change adaptation and mitigation), to financial years commencing on 1 January 2022 or to reports published after 1 January 2022. WHY ACCIONA DEVELOPED THIS EXERCISE Global investment in sustainable infrastructure is required to meet 72% of … But what is the EU Taxonomy, exactly? an EU taxonomy. Pensions and ESG: where are we now and what can we expect in the future? It directly affects all regulations i… News 11.03.2020 EU-Taxonomie. Die EU-Taxonomy. However, it will not start applying in practice until 1 January 2022 at the earliest. Information on data protection can be found at www.esma.europa.eu under the heading ‘Data protection’. The TEG’s recommendations are designed to support the European Commission in the development of the delegated act on climate change mitigation and climate change adaptation under the Taxonomy Regulation. To help you navigate and control risk in a challenging legal landscape, we have collated a range of key advice and guidance. To help you stay up-to-date with key regulatory developments in a time of accelerating change, we have collated a range of crucial horizon scanning content. We would advise you pour yourself a large glass of your favourite tipple and wrap a nicely chilled towel around your head before delving into that detail. contribute substantially to at least one of the environmental objectives; “do no significant harm” to any of the other environmental objectives; be carried out in compliance with minimum social and governance safeguards; and. Ten areas range from fossil fuels, bioenergy and hydropower to livestock and hydrogen. Brussels, 14 December 2020. information on how, and to what extent, the investments that underlie their financial product support economic activities that meet the four tests for environmental sustainability under the Taxonomy Regulation, or. Mag. However, so much attention has been focused on how the taxonomy will be defined and the TEG reports on this that some may have missed, or failed to fully appreciate, the other requirements in the Taxonomy Regulation - including the changes that the Regulation will make to the NFRD and the impact this will have on large corporates by requiring clear disclosure of the proportion of corporate activities that are or are not taxonomy compliant. Proponents argue that it should be included because it is a low-carbon source of energy, whilst critics claim the problems associated with radioactive waste mean it does not meet the “do no significant harm” principle under the Regulation. Verordnung (EU) Nr. Next steps for the EU Taxonomy and how this relates to other taxonomy efforts . On 12 July 2020, Regulation (EU) 2020/852 (the Taxonomy Regulation) came into force, bringing with it an exhaustive list of environmental objectives being: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; One year after the initial report, the European Parliament and European Council adopted the Taxonomy Regulation in December 2019. On 22 June 2020, the Taxonomy Regulation was published in the Official Journal of the European Union and entered into force on 12 July 2020. Sustainable Finance - Sustainable finance, Partner, Global Head of Environment & Climate Change / London, Environment & Climate Change Managing Associate / London, European Commission consults on draft EU taxonomy delegated act for climate change mitigation and adaptation. The report contains recommendations relating to the overarching design of the EU taxonomy, as well as extensive implementation guidance on how companies and financial institutions can use and disclose against the taxonomy. The Taxonomy Regulation requires the European Commission to adopt, by 1 June 2021, a delegated act specifying the content and presentation of the information to be disclosed under Article 8, including the methodology to be used. März 2020. EU Commission should listen to science. März 2020 20. Explore our blogs for the latest news and insights across a range of key legal topics. This Consultation Paper may be of particular interest to non-financial undertakings and asset managers covered by Article 8 of Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’) as well as to investors and other users of non-financial information. One of the remaining sticking points in this context is how nuclear power should be treated in the TSC. Haufe Online Redaktion. Rather, it provides the toolkit for assessing whether a financial product or business is environmentally sustainable. September 2020. On 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. Furthermore, a three-year certification timeline is onerous for data centre operators, especially SMEs. The European Commission said in an FAQ that we can expect a consultation on the draft delegated act for the climate TSC in September/October 2020. Im Rahmen dieses Aktionsplans ist sie ein zentrales Element, auf der andere legislative und nicht-legislative Maßnahmen in den nächsten Jahren aufbauen werden. The initial focus has been on defining what is sustainable in climate terms but the intention is to come up with rules on other environmental sustainability objectives, and to extend this to social objectives at a later stage. Some of the products are offered on a subscription basis. Adopted by the Council of the EU on April 15, 2020, with specific criteria being developed throughout 2020 and 2021, the “EU Taxonomy” aims to provide a unified classification system for “green” and “sustainable” economic activities under the EU’s sustainable finance regulations. Technical screening criteria Substantial contribution to climate change mitigation The activity complies with either of the following criteria: 1. … In order to inform its work on the action plan, including on the EU taxonomy, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018. It also clarifies that this delegated act is separate from the other delegated act needed under the Taxonomy Regulation to implement the TSC, and that it will complement the wider NFRD review (mentioned above). So it is relevant to banks, insurers and companies with securities traded on a regulated market, in each case if they have more than 500 employees. The introduction of the EU Taxonomy is getting closer and the impact will be significant * To directly request the webinar recordings, click here. EU member states approved the initial version of the taxonomy in December 2019, clearing the way for its integration into Europe’s climate policies. But a word of warning: the TSC are not for the faint hearted. Within the framework of the Taxonomy Regulation, the TEG has been asked to develop recommendations for technical screening criteria for economic activities that can make a substantial contribution to climate change mitigation or adaptation, while avoiding significant harm to the four other environmental objectives: sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention control, and protection and restoration of biodiversity and ecosystems. A … On June 18, 2020 the EU Taxonomy Regulation was made official, starting a new era of sustainable financial regulations. To help inform the delegated act, the Commission also requested advice from the European Supervisory Authorities in September 2020. 10 June 2020 . You are using an outdated browser. The report is supplemented by a technical annex containing: The TEG has also prepared excel tools to help users of the Taxonomy to implement it in their own activities. The EU Taxonomy for sustainable finance: FAQs for financial market participants. An idea first pitched by the High Level Expert Group (HLEG) on Sustainable Finance – appointed by the European Commission in 2016 to advise on ‘greening’ financial markets – the EU Taxonomy was approved by the European Parliament in June of this year. 130 NGOs and experts are sounding the alarm on the EU’s green finance rules, the ‘Taxonomy’, and calling for them to be rooted in science. December 15, 2020 Bácsi Éva Leave a Comment on An EU Sustainable Taxonomy MUST be Rooted in Climate and Environmental Science and not include Small Hydro he global climate strikes have consistently made a simple demand: listen to the science. October 2020 Taxonomy Alignment Screening. No green light for small hydropower in EU Finance Taxonomy 18.12.2020 Hydropower is not a sustainable investment. Think of it as an EU dictionary of what activities may and may not be called sustainable. EU taxonomy final report: 2020 starts a decade of action on climate change. An EU Taxonomy is indispensable in making the EU climate targets implementable in practice. Prior to this regulation there was no harmonised standard in Europe to classify green investments. The delegated acts for the TSC for the first two environmental objectives (climate change adaptation and climate change mitigation) must be adopted by 31 December 2020 so that the taxonomy can start to apply from 1 January 2022 to those two environmental objectives. Summary of the EU Taxonomy that was Launched in 2020 The European Commission established a Technical Expert Group (TEG) on sustainable finance midway through 2018, tasked to advise with a range of policy reforms. ESMA, EBA and EIOPA) to develop, jointly, regulatory technical standards specifying the details of the presentation and content of the information in relation to the principle of “do no significant harm”. Explore our latest insights to keep abreast of key legal developments. The second part, to be published in May 2020, will cover new EU regulations on sustainability‐related disclosures in the financial services sector, the European Bond Standard, the ecolabel for financial products, and the European Green Deal. We make the move to a competitive, climate neutral economy in Europe possible and support an EU taxonomy that helps accelerate investments in sustainable solutions. Both reports were subject to an open call for feedback to gather views from stakeholders. In July 2020, the Commission published a consultation on an inception impact assessment (also known as a “roadmap”) on the delegated act needed under Article 8. On 22 June 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (widely referred to as the Taxonomy Regulation) was published in the Official Journal of the EU, marking a significant step in the realisation of the European Commission's Action Plan on Financing Sustainable Growth (the EU Action Plan). For this COP, all countries must review their Nationally Determined Contributions (NDCs) and submit mid-century decarbonisation plans in line with their commitments under the Paris Agreement. EU finalises Sustainable Finance Taxonomy: New obligations for financial market participants and large public-interest entities 24 January 2020 Political agreement was reached in December 2019 on the Taxonomy Regulation following intense negotiations. You are going to need it. The taxonomy cannot apply in practice until the TSC for the relevant objectives have been adopted. 16 December 2020. On 18 June 2020, the European Parliament formally adopted the EU's Sustainability Taxonomy Regulation. Updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria f… I will shed light on the design, advantage and challenges of the taxonomy. We … However, the Commission is currently carrying out a wider review of the NFRD and one of the issues being considered is whether the NFRD should be extended to cover other types of companies. EU Taxonomy Regulation: what does it do and what happens next? März 2018 von der EU-Kommission veröffentlichten Aktionsplan zur Finanzierung von nachhaltigem Wachstum zurückzuführen. The Taxonomy Regulation is one of the pillars of the EU’s sustainable finance and climate change agenda and forms part of a wider package of sustainable finance legislation, which includes the Disclosure Regulation and the Low Carbon Benchmarks Regulation. The aim of the Regulation is to provide an EU-wide framework for classifying economic activity as environmentally sustainable (an overview of the Regulation can be found in our memo on the subject). II (Non-legislative acts) REGULATIONS COMMISSION DELEGATED REGULATION (EU) 2020/1989 of 6 November 2020 amending Delegated Regulation (EU) 2019/815 as regards the 2020 update of t Taxonomy Regulation. Contract lawyers from Linklaters, consultation on an inception impact assessment. Die RTS referenzieren u. a. auf den technischen Bericht und seinen 593 Seiten umfassenden Anhang der TEG (Technical Expert Group) – häufig EU-Taxonomie genannt – vom 9. EU Taxonomy: ECOS joins 130 organisations in a call for science-based green finance rules. The EU Taxonomy is a noteworthy milestone that sets a common language for collaboration in sustainable finance. The Commission put forward the action plan on financing sustainable growth in March 2018. And although this consultation document is particularly light on detail, it does say that the Commission will consider whether the three indicators (turnover, Capex and Opex) against which companies are to disclose the proportion of their activities which are sustainable need to be specified in more detail and whether different indicators should be developed for financial undertakings disclosing under the NFRD (i.e. Bron WWF Europe. The Commission will adopt a delegated act by June 2021 specifying the information companies subject to the non-financial reporting directive will have to disclose on how, and to what extent, their activities align with those considered environmentally sustainable in the Taxonomy. There are four tests that an economic activity must satisfy to be “environmentally sustainable” under the taxonomy. That’s what the EU sustainable finance agenda and the European Green Deal are all aiming for. On 9 March 2020, the TEG published its final report on EU taxonomy. The report is supplemented by a technical annexcontaining: 1. 4 ACCIONA CASE STUDY 2. On 18 December 2019, the Council and the European Parliament reached a political agreement on the Taxonomy Regulation. We are at a crucial time now to make this language work for collective action, and this needs us to focus on the detailed criteria and governance mechanisms that will unlock the much-needed resources. März 2020. For more information on the Disclosure Regulation, see our publication: ESG Disclosure Regulation. On 18 June 2020, the European Parliament formally adopted the EU's Sustainability Taxonomy Regulation.The aim of the Regulation is to provide an EU-wide framework for classifying economic activity as environmentally sustainable (an overview of the Regulation can be found in our memo on the subject). What investors need to know now and how ISS ESG can help them implement it. 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