The European Parliament and Council of the EU have adopted the Taxonomy Regulation which sets out the harmonised criteria to determine whether an economic activity is environmentally sustainable. The aim is to boost green investments and prevent ‘greenwashing’. It should enable investors to focus on sustainable investment and thereby help the EU become climate neutral by 2050. Under the Regulation, an economic activity can be labelled as environmentally sustainable if it contributes to at least one of the six environmental goals without significantly harming any of the others:
- climate change mitigation and adaptation;
- sustainable use and protection of water and marine resources;
- transition to a circular economy, including waste prevention and increasing the uptake of secondary raw materials;
- pollution prevention and control; and
- protection and restoration of biodiversity and ecosystems.
The full regulation can be found here.