Transitioning to a climate-neutral economy by 2050 requires clear tools and guidance, reflecting scientific evidence and market experience, to give confidence to companies and investors to act.

As asked in the action 1 of the action plan: financing sustainable growth published by EU in March 2018, it becomes urgent the establishment of an EU classification system for sustainable activities, i.e. an EU taxonomy. The European Commission followed through on this action in May 2018 with a proposal for a regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy regulation). The European Commission established therefore a Technical Expert Group (TEG) on sustainable finance in July 2018. On 5 December 2019, the Council and the European Parliament reached a political agreement on the Taxonomy Regulation.

On 9 March 2020, the TEG published its final report on EU taxonomy (a classification tool, or list, of economic activities and performance criteria consistent with Europe’s commitment to net zero carbon emissions by 2050 and building resilience to climate change - report contains recommendations relating to the overarching design of the EU Taxonomy, as well as extensive implementation guidance on how companies and financial institutions can use and disclose against the taxonomy. The report is supplemented by a technical annex ( containing:

  • Updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria for do no significant harm to other environmental objectives.
  • An updated methodology section to support the recommendations on the technical screening criteria.

The TEG has also prepared excel tools to help users of the Taxonomy to implement it in their own activities.

The EU Taxonomy provides the clearest reference for companies and investors of an economy that wants fulfil Europe’s 2030 and 2050 climate goals. It will encourage the growth of low carbon sectors and the decarbonisation of high emissions ones. As transitioning to a climate-neutral economy requires clear tools and guidance, Taxonomy aims at reflecting scientific evidence, in order to give confidence to private and public institutions to act. In the near future economic activities, such as electricity generation, cement-manufacturing, urban transport, crop-agriculture and telecommunication, if they meet the Taxonomy criteria, will be called “environmentally sustainable” in financial products. By providing criteria for activities in sectors that represent more than 90 per cent of Europe’s emissions, the Taxonomy is expected to highly expand the understanding of the value of sustainability.  

Next steps
Provided that the TEG’s recommendations are designed to support the European Commission in the development of the delegated act on climate change mitigation and climate change adaptation under the Taxonomy Regulation, further development of the EU Taxonomy will take place via a new Platform on Sustainable Finance, which is expected to be operating by autumn 2020. The first company reports and investor disclosures using the EU Taxonomy are due at the start of 2022.