The European Commission has released a set of frequently asked questions (FAQs) to support stakeholders in implementing the EU taxonomy, a classification system for sustainable economic activities. This effort is part of the Commission’s initiative to simplify processes and reduce the administrative burden on companies applying the EU sustainable finance framework.
The FAQs provide detailed clarifications on key aspects of the taxonomy, including the application of general requirements and the technical screening criteria outlined in the Taxonomy Climate and Environmental Delegated Acts. They also explain the ‘do no significant harm’ (DNSH) criteria, which ensure that economic activities contributing to one environmental objective do not negatively impact others. Additionally, the FAQs address reporting obligations for activities covered under the Climate and Environmental Delegated Acts.
“The EU taxonomy provides investors with a common understanding of the environmental impacts of their investments while guiding companies’ sustainable transition efforts. Our focus now is to improve the usability of the framework, and these FAQs will help companies as they apply the taxonomy,” said Mairead McGuinness, Commissioner for Financial Services, Financial Stability, and Capital Markets Union.
The EU taxonomy is central to the European Union’s sustainable finance framework, serving as a key tool to enhance market transparency. It aims to direct investments toward activities critical to achieving the European Green Deal objectives, such as transitioning to a greener and more sustainable economy.
