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.
Updates to EU taxonomy
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 | Arts, entertainment, and recreation | Construction and real estate activities | Disaster risk management |
| Education | Energy | Environmental protection and restoration activities | Financial and insurance activities |
| Forestry | Human health and social work activities | Information and communication | Manufacturing |
| Professional, scientific, and technical activities | Services | Transport | 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 | Marine and water resource protection | Biodiversity and ecosystem protection |
| Climate change adaptation | Climate change mitigation | 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.
Sources:
– “Call for feedback by the PSF on preliminary recommendations for the review of the Climate Delegated Act and the addition of activities to the EU taxonomy” by the European Commission (Jan 2025). Available at Call for feedback – Platform on Sustainable Finance
– “EU Platform on Sustainable Finance Proposes Key Updates to EU Taxonomy” by ESG News (Jan 2025). Available at EU Platform on Sustainable Finance Proposes Key Updates to EU Taxonomy – ESG News
– “EU Platform on Sustainable Finance Unveils Proposals to Simplify, Expand EU Taxonomy” by Mark Segal at ESG Today (Jan 2025). Available at EU Platform on Sustainable Finance Unveils Proposals to Simplify, Expand EU Taxonomy – ESG Today
– “EU Taxonomy Navigator” by the European Commission (n.d.). Available at EU Taxonomy Navigator
– “Platform on Sustainable Finance Draft Report on Activities and Technical Screening Criteria to be Updated or Included in the EU Taxonomy” by the Platform on Sustainable Finance (Jan 2025). Available at Platform on Sustainable Finance draft report on activities and technical screening criteria to be updated or included in the EU taxonomy
