Achieving the SDGs in the Union requires the channelling of capital flows towards sustainable investments. Such assessments and estimates should only compensate for limited and specific parts of the desired data elements, and produce a prudent outcome. 2. Additionally, investors would invest in environmentally sustainable financial products across the Union with higher confidence, thereby improving the functioning of the internal market. Political agreement on the final compromise text of the Taxonomy Regulation was reached in December 2019, and the EU Parliament is expected to adopt it at some point during 2020. In the context of achieving the SDGs in the Union, policy choices such as the creation of a European Fund for Strategic Investment, have been effective in contributing to the channelling of private investment towards sustainable investments alongside public spending. However, the Bill has now fallen as it failed to complete its passage through Parliament before the end of the 2017-19 Parliamentary session. A multi-stakeholders Platform on Sustainable Finance (incl. 4. We bring together lawyers of the highest calibre; progressive thinkers driven by the desire to help our clients achieve business success. That information will not only help financial market participants and other relevant actors on the financial markets to easily identify which economic operators carry out environmentally sustainable economic activities, but will also make it easier for those economic operators to raise funding for their environmentally sustainable activities. 2. 3. (58)  Regulation (EU) No 538/2014 of the European Parliament and of the Council of 16 April 2014 amending Regulation (EU) No 691/2011 on European environmental economic accounts (OJ L 158, 27.5.2014, p. 113). European Union Brussels , 17 December 2019 (OR. The Platform shall be chaired by the Commission and constituted in accordance with the horizontal rules on the creation and operation of Commission expert groups. The Platform will be composed of public sector experts from the European Environmental Agency, the European Supervisory Authorities and the European Investment Bank and the European Union Agency for Fundamental Rights, together with private sector experts including financial and non-financial market and business actors and experts representing civil society, including those with expertise in the field of environmental, social, labour and governance issues. 5. Officially called “Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, … Such financial market participants and issuers include financial market participants that make available environmentally sustainable financial products and non-financial companies that issue environmentally sustainable corporate bonds. In addition, individual Member States will need to abide by the criteria of the Taxonomy Regulation in relation to public measures, standards or labels concerning financial products or corporate bonds offered by issuers and other financial market participants which are to be labelled as environmentally sustainable. An economic activity should not qualify as environmentally sustainable if it causes more harm to the environment than the benefits it brings. Access all of the content that you have previously selected to bookmark. The information disclosed should enable investors to understand the proportion of the investments underlying the financial product in environmentally sustainable economic activities as a percentage of all investments underlying that financial product, thereby enabling investors to understand the degree of environmental sustainability of the investment. (19)  Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste (OJ L 190, 12.7.2006, p. 1). (49)  Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC(OJ L 315, 14.11.2012, p. 1). To give sufficient time to the relevant actors to familiarise themselves with the criteria for qualification as environmentally sustainable economic activities set out in this Regulation and to prepare for their application, the obligations set out in this Regulation should become applicable, for each environmental objective, 12 months after the relevant technical screening criteria have been established. 1. The Taxonomy Regulation also applies to companies and firms within the scope of the Non-Financial Reporting Directive (EU Directive 2014/95/EU). For more information on how we use cookies, or how to change your browser settings, please see our Cookie Policy. A copy of the agreed text was published on 18 December 2019 and can be found here6. 2. in respect of the environmental objectives referred to in points (c) to (f) of Article 9 of Regulation (EU) 2020/852, by 1 June 2022. For the purposes of establishing the degree to which an investment is environmentally sustainable, an economic activity shall qualify as environmentally sustainable where that economic activity: contributes substantially to one or more of the environmental objectives set out in Article 9 in accordance with Articles 10 to 16; does not significantly harm any of the environmental objectives set out in Article 9 in accordance with Article 17; is carried out in compliance with the minimum safeguards laid down in Article 18; and. This document is an excerpt from the EUR-Lex website, Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance), OJ L 198, 22.6.2020, p. 13–43 (BG, ES, CS, DA, DE, ET, EL, EN, FR, GA, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV), ELI: http://data.europa.eu/eli/reg/2020/852/oj, REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. 1. The legislative text of the EU taxonomy, the classification system for environmentally sustainable economic activities, was adopted in June 2020. The Taxonomy is also linked to the other regulatory initiatives regarding sustainable finance, including an EU Green Bond Standard, low-carbon benchmarks and corporate disclosures. The Platform should be constituted in accordance with the applicable horizontal rules on the creation and operation of Commission expert groups, including with regard to the selection process. However, effectively the timeframe will be substantially longer as the requirements of the Regulation will apply only after the adoption of the delegated acts establishing the technical screening criteria for each environmental objective. (4)  Decision No 1386/2013/EU of the European Parliament and of the Council of 20 November 2013 on a General Union Environment Action Programme to 2020 ‘Living well, within the limits of our planet’ (OJ L 354, 28.12.2013, p. 171). An economic activity should qualify as contributing substantially to one or more of the environmental objectives set out in this Regulation where it directly enables other activities to make a substantial contribution to one or more of those objectives. Such a classification system is needed in order to guide all market actors on what economic activities are sustainable and in line with the EU 2050 climate goal. The Taxonomy tool requires investors, companies, and financial institutions to outline the environmental sustainability of their economic activities and defines technical screening criteria for economic activities. For the purposes of this Regulation, the term ‘energy efficiency’ is used in a broad sense and should be construed by taking into account relevant Union law, including Regulation (EU) 2017/1369 of the European Parliament and of the Council (48) and Directives 2012/27/EU (49) and (EU) 2018/844 (50) of the European Parliament and of the Council, as well as the implementing measures adopted pursuant to Directive 2009/125/EC of the European Parliament and of the Council (51). (55)  Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC (OJ L 342, 22.12.2009, p. 1). The word “nuclear” is absent from the text, one must read between the lines. Status of the EU Taxonomy Regulation and requirements. Financial market participants shall include in the information to be disclosed pursuant to Article 6(1) and (3) of this Regulation the information required under Article 5 of Regulation (EU) 2020/852.’; in paragraph 5, the first subparagraph is replaced by the following: ‘5. (2)  Position of the European Parliament of 28 March 2019 (not yet published in the Official Journal) and Position of the Council at first reading of 15 April 2020 (OJ C 184, 3.6.2020, p. 1). That report shall evaluate the following: the progress in implementing this Regulation with regard to the development of technical screening criteria for environmentally sustainable economic activities; the possible need to revise and complement the criteria set out in Article 3 for an economic activity to qualify as environmentally sustainable; the use of the definition of environmentally sustainable investment in Union law, and at Member State level, including the provisions required for setting up verification mechanisms of compliance with the criteria set out in this Regulation; the effectiveness of the application of the technical screening criteria established pursuant to this Regulation in channelling private investments into environmentally sustainable economic activities and in particular as regards capital flows, including equity, into private enterprises and other legal entities, both through financial products covered by this Regulation and other financial products; the access by financial market participants covered by this Regulation and by investors to reliable, timely and verifiable information and data regarding private enterprises and other legal entities, including investee companies within and outside the scope of this Regulation and, in both cases, as regards equity and debt capital, taking into account the associated administrative burden, as well as the procedures for the verification of the data that are necessary for the determination of the degree of alignment with the technical screening criteria and to ensure compliance with those procedures; 2. The EU Technical Expert Group (TEG) on Sustainable Finance has released its highly anticipated final recommendations for the EU taxonomy, including a technical annex with updated technical screening criteria.. EUBA members have written a joint letter to Member State authorities on the EU Taxonomy Regulation’s draft delegated act on climate-related objectives and its annexes. As stated in the Action Plan on Financing Sustainable Growth the transport sector represents about 30 % of the additional annual investment needed for sustainable development in the Union, for example to increase electrification or to support the transition to cleaner modes of transport by promoting modal shift and better traffic management. Common criteria for determining whether economic activities qualify as sustainable, including their impact on the environment, could underpin future similar initiatives of the Union to mobilise investment that pursues climate-related or other environmental objectives. When establishing and updating the technical screening criteria the Commission should take into account relevant Union law, including Regulations (EC) No 1221/2009 (55) and (EC) 66/2010 (56) of the European Parliament and of the Council, as well as Commission Recommendation 2013/179/EU (57) and the communication of the Commission of 16 July 2018 on ‘Public procurement for a better environment’. (*1)  Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).’;". Updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria f… 1. (14)  Directive 2008/105/EC of the European Parliament and of the Council of 16 December 2008 on environmental quality standards in the field of water policy, amending and subsequently repealing Council Directives 82/176/EEC, 83/513/EEC, 84/156/EEC, 84/491/EEC, 86/280/EEC and amending Directive 2000/60/EC of the European Parliament and of the Council (OJ L 348, 24.12.2008, p. 84). In order to ensure that the disclosure to investors is clear and not misleading, financial market participants should clearly explain the basis for their conclusions as well as the reasons for having to make such complementary assessments and estimates for the purposes of disclosure to end investors. This site uses cookies to offer you a better browsing experience. To address existing obstacles to the functioning of the internal market and to prevent the emergence of such obstacles in the future, Member States and the Union should be required to use a common concept of environmentally sustainable investment when introducing requirements at national and Union level regarding financial market participants or issuers for the purpose of labelling financial products or corporate bonds that are marketed as environmentally sustainable. (41)  Regulation (EU) No 511/2014 of the European Parliament and of the Council of 16 April 2014 on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization in the Union (OJ L 150, 20.5.2014, p. 59). I accept cookies. Private sector experts should include representatives of financial and non-financial market participants and business sectors, representing relevant industries, and persons with accounting and reporting expertise. In establishing and updating the technical screening criteria for the environmental objective of climate change mitigation, the Commission should take into account and provide incentives for the ongoing and necessary transition towards a climate-neutral economy in accordance with Article 10(2) of this Regulation. This is evident in the insightful material we produce and news coverage we receive. The Council today adopted a regulation setting out an EU-wide classification system, or "taxonomy", which will provide businesses and investors with a common language to identify those economic activities which are considered environmentally sustainable. 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