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January updates to EU Taxonomy

 

This month, the EU’s Platform on Sustainable Finance (PSF) initiated a public consultation to collect feedback on the updates made to the EU Taxonomy, as system for classifying and reporting on sustainable activities. The intention was to improve usability and simplicity while expanding the scope of the activities included.


The organisation published a report with initial findings from extensive stakeholder engagement, particularly with companies, and is now seeking further consultation from the public. In introducing the note to the report, Helena Viñes Fiestas, Chair of the PSF, stated:

 
 
“During this period, our priority has been to improve the usability and effectiveness of the Taxonomy and the broader sustainable finance framework. Once the necessary changes have been implemented, the Platform hopes that a future mandate will allow us to focus on incorporating many more activities into the Taxonomy.”
 
 

Currently, the EU Taxonomy includes the following sectors and their activities:

 
  • Accommodation activities
  • Education
  • Forestry
  • Professional, scientific, and technical activities
  • Arts, entertainment, and recreation
  • Energy
  • Human health and social work activities
  • Services
  • Construction and real estate activities
  • Environmental protection and restoration activities
  • Information and communication
  • Transport
  • Disaster risk management
  • Financial and insurance activities
  • Manufacturing
  • Water supply, sewerage, waste management and remediation
 

Proposed changes include expanding the scope to include areas such as digital services or mining and smelting of key metals such as lithium, copper, and nickel. Other metal manufacturing, such as that of iron and steel, is included in the Taxonomy list of activities.

To be considered sustainable, an activity must contribute significantly to at least one of the following six objectives and Do No Significant Harm (DNSH) to any of the others, as well as complying with the minimum safeguards.

 
  • Pollution prevention and control
  • Climate change adaptation
  • Marine and water resource protection
  • Climate change mitigation
  • Biodiversity and ecosystem protection
  • Circular Economy transition
 

One aspect of the feedback was the call for the criteria and instructions to be made clearer and more practicable. This is essential for implementation and interpretation of results because, as in the technical screening criteria, the report states:

 
 
“A clear description of the technical screening criteria reduces implementation costs and ensures that criteria be interpreted in the same way by different preparers and auditors, providing comparability of the reporting results.”
 
 

Another area of improvement is in the DNSH criteria, particularly in regard to new activities proposed.


You can read the official report here.


The consultation is open to the public from January 8 to February 5, 2025. Stakeholders are invited to share their evidence-based feedback via the official consultation link.

 
 

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Author: Marie Gomersall, Sustainability Expert at EFF

 
 

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