The Green Taxonomy is a classification framework developed by the European Union to identify economic activities that make a substantial contribution to achieving specific environmental objectives. It aims to direct investment towards sustainable activities, thereby facilitating the transition to a green and resilient economy. The taxonomy plays a crucial role in the fight against climate change by providing a clear and common guide for investors, companies and regulators.
Green Taxonomy objectives
The main objectives of the Green Taxonomy are as follows:
- Encouraging sustainable investment : By defining clear criteria for what constitutes sustainable economic activity, taxonomy helps to channel capital flows towards ecological projects.
- Transparency and comparability It aims to improve the transparency and comparability of financial and non-financial information relating to sustainable investment.
- Environmental Risk Reduction Taxonomy: By directing investments towards environmentally-friendly activities, taxonomy helps reduce the financial risks associated with environmental and climate impacts.
- Alignment with Environmental Objectives Taxonomy supports the objectives of the Paris Agreement and the Green Pact for Europe by promoting economic activities that reduce greenhouse gas emissions and protect ecosystems.
Principles of Green Taxonomy
The Green Taxonomy is based on six main environmental objectives:
- Climate change mitigation Reducing greenhouse gas emissions.
- Adapting to climate change Strengthening resilience to climate impacts.
- Sustainable Use and Protection of Aquatic and Marine Resources Preservation of water resources and marine ecosystems.
- Transition to a Circular Economy Promoting resource efficiency and waste reduction.
- Pollution Prevention and Control Reducing emissions of pollutants into the air, water and soil.
- Protection and Restoration of Biodiversity and Ecosystems Safeguarding and restoring natural habitats and biodiversity.
Eligibility and Performance Criteria
For an economic activity to be considered sustainable according to the Green Taxonomy, it must meet several criteria:
- Substantial contribution The activity must make a significant contribution to one of the six environmental objectives.
- Do No Harm (DNSH) It must not cause significant harm to any of the other environmental objectives.
- Compliance with Social and Governance Standards The business must comply with minimum standards in terms of human rights, labor and good governance.
Implementation and Application
Implementing the Green Taxonomy involves several steps for companies and investors:
- Activity Evaluation Companies need to assess their activities to determine which are aligned with the taxonomy criteria.
- Reporting and Transparency Companies and financial institutions must disclose information on the proportion of their activities and investments that comply with the taxonomy.
- Certification and verification Certification and verification mechanisms can be put in place to ensure compliance with taxonomy criteria.
Impact of Green Taxonomy
The Green Taxonomy has a significant impact on several aspects:
- Financing Ecological Transition It facilitates access to financing for green projects, reducing transaction costs and increasing investor confidence.
- Innovation and Competitiveness By encouraging investment in sustainable technologies and solutions, taxonomy stimulates innovation and boosts the competitiveness of European businesses.
- Financial Risk Reduction By integrating environmental criteria into investment decisions, we help to reduce the financial risks associated with environmental and climate impacts.
How Phishia can help you with Green Taxonomy
Phishia, a consulting firm specializing in sustainability, offers comprehensive support for integrating Green Taxonomy into your business activities and investments. Here's how we can help:
- Diagnosis and Assessment : We carry out an in-depth diagnosis of your activities to identify those that are eligible under the Green Taxonomy criteria.
- Compliance Strategy We develop tailor-made strategies to align your operations with the requirements of the taxonomy, while optimizing your environmental performance.
- Reporting and Transparency We can help you produce clear and comprehensive compliance reports, facilitating transparency and communication with your stakeholders.
- Awareness and Training We offer training programs to make your teams aware of the requirements and benefits of the Green Taxonomy.
- Monitoring and Verification We put in place monitoring and verification mechanisms to ensure the ongoing compliance of your activities and investments with the taxonomy's criteria.
By choosing Phishia for your Green Taxonomy support, you benefit from our expertise in sustainability and environmental management, enabling you to maximize the benefits of this regulation while actively contributing to the ecological transition.
