On April 16, the Council of the EU (the Council) published a press release regarding a unified EU classification system to encourage private investment in sustainable growth and contribute to a climate-neutral economy (the Press Release).
In the Press Release, the Council announced that it adopted the Taxonomy Regulation, which sets out an EU-wide classification system, or “taxonomy,” to provide businesses and investors with a common language to identify environmentally sustainable economic activities. For further information on the Taxonomy Regulation, please see the January 10, 2020 edition of Corporate & Financial Weekly Digest.
The Council reiterates that the future framework will be based on six EU environmental objectives:
- climate change mitigation;
- climate change adaptation;
- sustainable use and protection of water and marine resources;
- transition to a circular economy;
- pollution prevention and control; and
- the protection and restoration of biodiversity and ecosystems.
The taxonomy for the first two objectives above should be established by the end of 2020 in order to ensure full application by the end of 2021.The taxonomy for the four remaining objectives should be established by the end of 2021 for application by the end of 2022.
The Press Release notes that the Council’s decision was adopted at first reading and now requires adoption by the European Parliament at second reading before it goes into effect, following publication in the Official Journal of the EU.
The Press Release is available here.