5: The EU Taxonomy

The EU taxonomy originates from the EU climate strategy, which aims to create a carbon-neutral EU by 2050.

One of the prerequisites for achieving this goal is investment in sustainable activities. Therefore, the EU has established a common set of rules on how and to what extent an activity can be considered environmentally sustainable.

In practice, it is a classification system based on common definitions of sustainability that allows companies to work on, make visible and communicate sustainability. In particular, it helps investors to distinguish between sustainable and unsustainable investments.

The Taxonomy Regulation sets out six environmental objectives that form the basis of the concepts used in the EU to talk about environmental sustainability:

• Climate change mitigation

• Adaptation to climate change

• Sustainable use and protection of water and marine resources.

• Transition to a circular economy

• Pollution prevention and control

• Protection and restoration of biodiversity and ecosystems.