Draft Report on Taxonomy Extension Options linked to Environmental Objectives: EBF response

14 September 2021

The EBF supports the extension of the EU Taxonomy ‘beyond green’ to include significantly harmful activities, therefore creating a ‘permanent significantly harmful’ red category.

• Activities with the potential to improve environmental performance must be considered and should not fall under the category of ‘always harmful’ activities. This intermediate category should encompass all those activities which are not classified as ‘green’ (those activities aligned with the Taxonomy and DNSH criteria) or “red” (those activities which cannot solve DNSH issues).
• The development of a real transition framework is critical as clear guidance on the consistent trajectories of activities is needed. It is fundamental that the extended taxonomy support the transition of entire sectors. Otherwise, there would be the concrete risk of significantly accelerating stranded assets for banks – this would significantly weaken EU banks and their ability to finance the transition of the EU economy.
• Defining an official transition path against which a company’s transition can be assessed should be defined at sector level and by geography by a recognized (public) authority and be aligned with each country’s Nationally Determined Contribution and national climate laws.
• The EU should be cautious and closely evaluate the impact of a ‘red’ taxonomy on the competitiveness of European businesses vis-à-vis the jurisdictions without a similar Taxonomy in force.

EBF

© EBF