EU Taxonomy: public consultation to propose key updates

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The EU Taxonomy is the classification system adopted by the European Union to identify economic activities that contribute to environmental goals. Introduced in 2022, it is a key tool for steering investment towards sustainable initiatives and aligning the private sector with the objectives of the European Green Deal. Its main purpose is to ensure that activities classified as sustainable meet strict criteria and do not compromise other environmental objectives. The EU Taxonomy includes reporting obligations initially for climate change mitigation and adaptation, based on the Climate Delegated Act. The other four targets (sustainable use of water and marine resources, circular economy, pollution control and biodiversity protection) will be implemented from 2024, as stipulated in the Environmental Delegated Act</

In a document published on 8 January, the Sustainable Finance Platform, formed by experts selected by the European Commission to advise on the development of sustainable finance policies, announced a public consultation aimed at improving the criteria of the EU Taxonomy. The main focus is on revising the Do No Significant Harm (DNSH) criteria of the Climate Delegated Act with the aim of assessing their effectiveness and proposing the inclusion of new activities such as digital solutions for the circular-economy, projects for the protection of biodiversity, sustainable use of water and marine resources, and the extraction of critical materials such as lithium, nickel and copper to mitigate climate change.

On 8 January 2025, the Platform released a preliminary report proposing changes to the Climate Delegated Act and suggesting the addition of new activities to the Taxonomy. This document, drafted by the Technical Working Group, gathers recommendations based on needs that emerged during the stakeholder dialogue. The consultation invites feedback from companies and stakeholders, emphasising the importance of diverse contributions to ensure that the Taxonomy meets the future challenges of sustainability. The report points out that the retrospective application of the DNSH criterion is complex and that many companies find it difficult to measure revenue alignment with these criteria. To overcome these issues, the platform is developing a more flexible approach and promoting the collection of concrete examples to improve the definition of the technical criteria.

Among the main recommendations expressed by the Platform, the proposal to expand the Taxonomy to include more sustainable economic activities stands out. However, the development of reliable and robust criteria requires careful planning, adequate resources, and adequate time to ensure that the new standards are applicable effectively. Suggested activities include, for example, innovative digital solutions aimed at pollution reduction, strategies to improve the sustainable management of natural resources and the extraction of critical materials such as lithium, copper and nickel, which are essential for technologies related to the green transition. Each proposal is accompanied by a clear definition, technical criteria for screening, and specific guidelines to help companies demonstrate compliance with the regulations of the Taxonomy.

The possible update of the criteria and the inclusion of new economic activities in the EU Taxonomy could represent a significant opportunity for companies and investors. However, it remains crucial to understand how the new criteria, if approved, will affect the reporting of companies and the ability of investors to assess real alignment with environmental objectives. Public consultation is crucial to collect comments and proposals, allowing the balancing of sustainability ambitions with technical and operational feasibility. The involvement of all stakeholders will be crucial to ensure that the Taxonomy continues to be a clear and effective reference for sustainable finance.

This article was realised in the framework of the project "Biodiversity services EU expansion" (CUP: E43D22000480009) in the framework of the Lombardy Region's call for tenders "PR FESR 2021-2027 - LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalisation of Italian companies. 3Bee is the naturetech company that develops innovative technologies for monitoring, protecting and regenerating biodiversity, supporting companies in defining customised climate strategies based on the analysis of their impacts and dependencies on nature. With an established portfolio in Italy, Germany and France and prominent partnerships, 3Bee continues its expansion into international markets to create real impact through technology.