EU Technical Expert Group on Sustainable Finance Publishes Final Taxonomy Recommendations03/09/2020The European Commission has published a final Taxonomy report of the Technical Expert Group on Sustainable Finance. The EU Taxonomy is the EU's classification system of sustainable activities, the legal basis of which is set out in the proposed Taxonomy Regulation (agreed at political level in December 2019). The proposed Taxonomy Regulation sets the environment objectives for the Taxonomy and imposes new obligations for market participants, large companies, the EU and EU Member States. The Taxonomy Regulation will be supplemented by secondary legislation that will set out detailed technical screening criteria to establish when an economic activity can be considered sustainable. The Taxonomy Report provides the TEG's final recommendations to the European Commission on certain content for much of that secondary legislation and replaces the earlier reports of the TEG. The Report includes, among other things:
- detailed technical screening criteria, including a summary of the economic activities covered by the criteria;
- recommendations on the design of the Taxonomy; and
- guidance on how market participants can implement Taxonomy disclosures.
In addition, the TEG has published a Usability Guide to the EU Green Bond Standard. Green bonds are bonds specifically earmarked to be used for climate-related and environmental projects. The Guide sets out the TEG's views on the application of the EU Green Bond Standard. The TEG also confirms that it is maintaining its recommendation that the EU Green Bond Standard be voluntary so that issuers that issue green bonds may use other market practices instead of the term "EU Green Bond."
View the final Taxonomy Report.
View the technical annex: Updated methodology & Updated Technical Screening Criteria.
View the Usability Guide to the EU Green Bond Standard.
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