EU Taxonomy

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The EU Taxonomy is a strategy to create a harmonised understanding of what actually constitutes sustainable activities across the European Union. It attempts to define ‘green activities’ for the first time, using minimum criteria that economic activities should comply with in order to be considered to be environmentally sustainable. As such, it forms a key component of the Sustainable Finance Action Plan, which aims to promote sustainable investment across the 27-nation bloc, and the Sustainable Finance Disclosure Regulation, which aims to make the sustainability profile of funds more comparable and better understood by end-investors. The taxonomy states that only activities which substantially contribute to one or more of six environmental objectives should be defined as being green. These are climate change mitigation; climate change adaption; protecting marine and water resources; transitioning to a circular economy; preventing pollution; and protecting or restoring biodiversity and ecosystems.”

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European Commission EU taxonomy for sustainable activities