EU taxonomy high on agenda of Presidents’ Board meeting

While the EU taxonomy is directly aimed at financial institutions, a key message of this session was that it will, in fact, have a strong direct impact on our industries too. As a central element of the Sustainable Finance agenda, it aims to establish a common understanding of what economic activities qualify as sustainable throughout the EU, to encourage more capital to flow to those activities and to prevent 'greenwashing'. The disclosure requirements will be mandatory for companies that come under the non-financial reporting Directive.

The session saw a valuable exchange between Mr Haag, who gave a first-hand insight into the aims and design of the taxonomy, and the Presidents’ Board members. Among the issues raised on the industry side was the taxonomy’s difficulty of screening for – and keeping up with – rapidly developing technologies and the absence of many of them from the current approach even though they are crucial to help other industries and sectors reduce their carbon emissions. The proportionality for SMEs was also flagged as, while reporting against the taxonomy is mandatory only for larger companies, the many SMEs who are suppliers to those companies will be indirectly impacted. The ability to remain competitive internationally and the need for a level playing field was another point of discussion.