Status on the EU sustainable finance framework
Published 19 October 2023
Category: Impact and ESG
In June 2023 the European Commission published and adopted a sustainable finance package with measures to expand and strengthen the EU sustainable finance framework. This update provides a closer overview of those measures which are now subject to scrutiny by the European Parliament and the Council.
Taxonomy Environmental Delegated Act
One of the measures adopted by the European Commission is the Taxonomy Environmental Delegated Act (“Environmental Delegated Act”). The Environmental Delegated Act together with Annex I-IV establishes technical screening criteria for economic activities substantially contributing to one of the remaining four environmental objectives in the Taxonomy Regulation:
- (i) sustainable use and protection of water and marine resources (see Annex I)
- (ii) transition to a circular economy (see Annex II)
- (iii) pollution prevention and control (see Annex III)
- (iv) protection and restoration of biodiversity and ecosystems (see Annex IV)
The Environmental Delegated Act includes sectors and economic activities deemed having the greatest potential to substantially contribute to the environmental objectives and for which the technical screening criteria could be developed without delay. However, for activities and sectors such as forestry, fishing, and agriculture further assessment of criteria is needed.
The adopted Environmental Delegated Act can be found here.
Amendments of Taxonomy Disclosures Delegated Act
Further, amendments to the Taxonomy Disclosures Delegated Act (“Disclosures Delegated Act”) regarding specific public disclosures have been set forward and adopted by the European Commission. The amendments cover both technical corrections as well as amendments to ensure consistency between its disclosure requirements and the Environmental Delegated Act.
The text amending the Disclosures Delegated Act can be found here and shall be seen in accordance with:
- amendments to Annex I, II, III, IV, V, VI, VIII and X of the Disclosures Delegated Act (see Annex V)
- revised Annex VI of the Disclosures Delegated Act (see Annex VI)
- revised Annex VIII of the Disclosures Delegated Act (see Annex VII)
Amendments of Taxonomy Climate Delegated Act
The European Commission has also adopted amendments to the existing Taxonomy Climate Delegated Act (“Climate Delegated Act”) and Annex I and II covering technical screening criteria for economic activities contributing to the first two environmental objectives in the Taxonomy Regulation:
The Climate Delegated Act is amended by establishing additional technical screening criteria for economic activities not included earlier. Those economic activities mainly cover transitional activities within the transport sector where zero-carbon solutions are still awaiting and manufacturing activities for key components for electrical equipment and low carbon transport making it possible to achieve greenhouse gas emissions savings in other activities. Further, few amendments have been made to improve some of the already existing technical screening criteria.
The adopted text amending the Climate Delegated Act can be accessed here.
Next steps: The Delegated Acts and amendments are now subject to a four-month scrutiny period by the European Parliament and the Council which may be extended with two months if requested. If the Delegated Acts and amendments are accepted, they are expected to apply from January 2024. We continue to monitor this process closely and prepare for the potential expansion of the technical screening criteria.