The Technical Expert Group on Sustainable Finance presented the results of its work on European taxonomy to stakeholders on Monday 24 June at a conference organised by the European Commission in Brussels.
In their expert view, it is unnecessary to wait for agreement between the co-legislators on the legislative proposal on the governance system of the taxonomy (see EUROPE 12026/4); the taxonomy can be used now.
Nathan Fabian, rapporteur of the Taxonomy sub-group, presented the main points of the report published last week (see EUROPE 12277/20). To this end, it contains technical selection criteria for 67 activities that can make a substantial contribution to climate change mitigation in the sectors of agriculture, manufacturing, energy, transport, water and waste, information and communication technologies and construction.
"It is not a rating of good or bad companies", he insisted, nor "a mandatory list of activities to invest in". The decision to invest or not remains in the hands of investors, but the taxonomy is there to help them assess the environmental impact of the investment, he explained.
Designed as a dictionary, the taxonomy can be used, from now onwards, to express investment preferences, for investment selection, for the design of "green" financial products, or to measure the environmental performance of a security or product, Mr Fabian said.
For Brenda Kramer, TEG Member and Senior Advisor, Responsible Investment at PGGM, a universal standard shared by companies, governments, financial institutions and researchers will ensure greater trust. Market players will be confident that the EU list covers existing legislation and enjoys broad support, she explained.
In particular, this will facilitate investment in activities that contribute to the transition to a sustainable economy. The taxonomy includes, for example, advice on gas use or building renovation. The fact that steel production can be described as sustainable is also a step forward in considerations about transition, she said.
For example, an aluminium company that does not meet environmental emission targets could apply for a 'green' loan to meet these thresholds. This 'green' loan would be in line with the EU taxonomy and once the company has achieved these objectives, it would itself be in line with the taxonomy, explained Helena Viñes Fiestas, a member of the Expert Group, who works at BNP Paribas.
"We need your feedback (…) it is above all your taxonomy, we want it to become the market taxonomy", said Olivier Guersent, Director-General, Directorate General for Financial Stability, Financial Services and Capital Markets Union, European Commission. The report will be submitted for public consultation in early July. On the basis of the results, the expert group is expected to make further recommendations to the Commission in December.
The mandate of the Expert Group has been extended until the end of the year. In addition, it will continue its work on usage of the taxonomy. The group intends to develop a detailed guide to facilitate its use, conduct a usability test and conduct a survey of companies. (Original version in French by Marion Fontana)