The EU Council is making progress on the regulation laying the foundations for the future taxonomy on sustainable finance, which will assess, sector by sector, the environmental sustainability of economic activities (see EUROPE 12026/4). The meeting of the expert group in the EU Council on Tuesday 3 September “went well”, according to a European source, and the text could soon be submitted to the Member States' ambassadors to the EU (Coreper) for agreement.
On Wednesday 4 September, before the European Parliament’s Committee on Economic and Monetary Affairs (ECON), Mika Lintilä, the Finnish Minister of Finance, said he was aiming for a political agreement (‘general approach’) in the autumn (see other news).
The proposed Regulation only lays down the principles and general scope of the future taxonomy. As a second step, the Commission is expected to establish, by means of delegated acts, the technical screening criteria for the taxonomy, on the basis of which it will be possible to determine whether and to what extent an economic activity is environmentally sustainable.
But several countries, including Germany and France, wanted this to be done through implementing acts so that national experts would be more involved in developing the criteria (see EUROPE 12282/17).
However, this poses a legal problem, since, while delegated acts by their nature complement a basic regulation, implementing acts must only carry out the regulation.
Among the options proposed, the Presidency had also suggested that the process of developing the technical screening criteria could, in the first phase, be implemented as non-binding guidelines which would then be followed, in the second phase, by delegated acts.
During the summer, this option was definitively rejected, because it also posed legal problems, the same source explained to us.
The compromise text, dated 28 August, of which EUROPE has a copy, now proposes that the Commission adopt delegated acts establishing the technical criteria and implementing acts for setting quantitative and/or qualitative thresholds that must be met by economic activity to be considered ‘sustainable’.
Their application is also postponed, since the text indicates that the Commission should adopt these acts by 1 July 2022 at the latest, with a view to ensuring their entry into force on 1 July 2023.
The Finnish Presidency has also increased the involvement of national experts in work on the sustainable finance platform, which is responsible for supporting the Commission's work in preparing delegated acts.
The text asks the Commission to maintain the existing Member States’ expert group on sustainable finance and to give it official status. It specifies that the Commission should inform the Member States through regular meetings and consult the group of Member States’ experts on the draft of each delegated act.
It should be noted that the compromise text maintains the proposal to extend the scope of the taxonomy to economic activities that enable another economic activity in order to improve its environmental performance in relation to one or more of the six environmental objectives defined in the taxonomy. (Original version in French by Marion Fontana)