The Council of the European Union has agreed a position on the proposed EU-wide sustainable finance taxonomy regulation. This would develop a common language for assessing what economic activities can be considered environmentally sustainable, thereby reducing fragmentation from market-based initiatives and varying national practices, and reduce misleading marketing of financial products, or ‘greenwashing’.
The environmental objectives identified in the proposal are:
- climate change mitigation
- climate change adaption
- sustainable use and protection of water and marine resources
- transition to a circular economy, including waste prevention and recycling
- pollution prevention and control; and
- protection and restoration of biodiversity and ecosystems.
It is propose that the taxonomy should be agreed by the end of 2021, and in full application by the end of 2022.