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Set out in a draft delegated act, the criteria in question are for determining which economic activities can be said to substantially contribute to climate change mitigation or adaptation.
The criteria generally follow the recommendations from the technical expert group (TEG) that advised the Commission on its sustainable finance action plan, but deviate from them in some respects.
Tsvetelina Kuzmanova, policy advisor at environment think tank E3G, said the delegated act had strengthened some of the thresholds compared with the TEG report, but that “we are concerned about the environmental integrity of the thresholds that have been weakened”.
“The strength of the EU taxonomy is that it sets science-based screening criteria against greenwashing, but the draft shows that the screening criteria proposed fail to rely on up-to-date data and established objectives across all activities,” she added.
The think tank said it was concerned some of the thresholds deviated from scientific evidence as a result of political and industry pressure.
It highlighted as sources of concern the potential use of natural gas as well as thresholds in the manufacturing, construction, agriculture, forestry and bioenergy sectors, saying these should be revisited.
Nathan Fabian, chief responsible investment officer at the Principles of Responsible Investment, was rapporteur for the TEG – and was recently appointed chair of the Platform on Sustainable Finance, the successor to the TEG.
He said the changes to the TEG’s recommendations appeared to result from “a combination of adjustments to improve measurability, resolve presentational issues in criteria, align criteria more closely with EU legislation and the addition of criteria for some economic activities”.
“Assessing how substantial the changes are from an environmental performance perspective will require careful review and I am confident that stakeholders will use the four-week consultation period to comment on these changes,” he said.
He added: “As the consultation on the taxonomy delegated act commences, I urge the Commission and co-legislators to ensure that the taxonomy criteria remain aligned to the EU’s sustainability goals, in line with the best available evidence.”
The consultation is open for four weeks. The Commission will consider the feedback received before finalising the adoption of the delegated act, which will then be subject to scrutiny by the European Parliament and the Council.
“The EU’s taxonomy regulation is a key piece of legislation that is central to the European Green Deal,” said Mairead McGuinness, Commissioner for financial services, financial stability and Capital Markets Union.
“It will be instrumental in channeling investment to green and sustainable projects. By contributing to this public consultation, you can have your say on the development of these rules.”
The delegated act and associated information can be found here.