The EU Taxonomy - May 2020: New regulations on the horizon, streamlining the definition of “green”

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The summary report, produced by the Sustainable Finance team in DNB Markets, highlights the main elements and methodology of the Taxonomy, as well as an overview of the various sectors covered with a brief introduction to the respective sector criteria. 
 
The EU has put in place an ambitious sustainability agenda for financial markets. The aim is to steer both public and private capital into sustainable investments, ensuring the achievement of the Paris Climate Agreement, while simultaneously protecting the stability of the financial system from environmental risks. 

In 2018, an Action Plan for Financing Sustainable Growth was launched and we are now approaching implementation of several new regulations and requirements. The center piece of this Action Plan is the so called EU Taxonomy, which provides criteria for what should actually qualify as environmentally sustainable, or simply put “green”.

This will broadly impact markets in terms of disclosure requirements for both investors and companies, where they will need to inform on their alignment with the Taxonomy.