On Wednesday 23 October, representatives of the European Parliament and the Council of the EU held, as announced (see EUROPE 12351/25) their first negotiation meeting on the Regulation laying the foundations for the future taxonomy on sustainable finance (see EUROPE 12026/4).
According to a parliamentary source, this first exchange of views between the co-legislators was "constructive". They believe there is a shared ambition to move forward on this issue and a common awareness that citizens expect the EU to respond in a concrete way to the climate emergency.
The meeting also made it possible to compare the positions of the co-legislators. According to the same source, there is, at this stage, a need for clarification and deeper explanations on certain elements of the text, in particular the scope of the legislation.
The source also reported "significant differences of opinion" on governance and the role of Member States and the European Parliament in the implementation of the taxonomy.
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 the co-legislators do not want to be excluded from the preparation of this work. In its text (see EUROPE 12333/8), the EU Council subtly proposed that the Commission should establish by implementing acts the quantitative and/or qualitative thresholds that must be met by economic activity in order to be considered 'sustainable', in order to strengthen the involvement of its national experts.
The European Parliament is also very committed to the rapid implementation of the taxonomy, it was noted. As a reminder, the EU Council proposed postponing the entry into force of the delegated acts to 2022.
Another parliamentary source mainly identified as a point of divergence the exclusion from or inclusion of certain activities in the taxonomy, such as nuclear energy, set directly in the regulation.
The question promises to be explosive. In its text (see EUROPE 12224/1), the European Parliament introduced provisions to ensure that investments in activities related to solid fossil fuels, nuclear energy or gas infrastructure can never fall into the category of sustainable financial products.
But the EU Council did not do so, against the wishes of Austria, Germany and Luxembourg (see EUROPE 12335/8). Countries such as France support the retention of nuclear energy in the taxonomy, as "an essential energy in the fight against global warming" (see EUROPE 12349/27).
Intensive lobbying on this issue is not about to wane and the negotiations will be closely monitored by many stakeholders. On the eve of this first 'trilogue', the organisations SMEunited, the European Association of Guarantee Institutions (AECM) and EUROCHAMBRES called on the negotiators to adopt a 'pragmatic approach'.
The organisations, which oppose extending the scope of the regulation to all financial market participants, argued that this would create a considerable administrative burden for small and medium-sized enterprises.
"New disclosure requirements should thus remain limited to those financial products that are advertised as sustainable and should only apply to large, institutional investors, as foreseen by the European Commission", they stressed.
The negotiators have scheduled a second meeting on November 6. (Original version in French by Marion Fontana)