The EU Taxonomy Regulation – the establishment of an EU classification system for sustainable activities - was published in the Official Journal of the European Union on the 22 June 2020 and entered into force on 12 July 2020. In line with these recommendations, the Taxonomy Regulation recognises six distinct environmental objectives (Environmental Objectives): Under the Taxonomy Regulation, an economic activity constitutes an environmentally sustainable activity if it: The Technical Screening Criteria will be built up gradually over time through delegated acts supplementing the Taxonomy Regulation, and will be used to determine whether an economic activity can be considered sustainable. ​Scroll through these slides to access the personalised features of your Dashboard. Council's first reading position on the taxonomy of sustainable activities Our people are experts of law; progressive thinkers, in tune with economic, political and market conditions, driven to help to provide the clear commercial advice you need to achieve business success. What is its scope and impact? The implications Apart from providing classification criteria for environmentally sustainable activities, the taxonomy introduces amendments to the recently introduced Disclosure Regulation on sustainability‐related disclosures in the financial services sector. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide … Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’) was published in the Official Journal on 22 June 2020 and entered into force 20 days later. ... unified EU taxonomy and the related concept of environmentally sustainable investment. For additional coverage on financial and regulatory news, visit Bridging the Week, authored by Katten’s Gary DeWaal. It is useful to think of the Technical Screening Criteria as an "encyclopaedia" of environmentally sustainable activities. It enters into force 20 days after publication, on 12 July 2020. A virtual library of regularly posted insights and legal updates based on your selected preferences. The Taxonomy Regulation requires the Commission to regularly review the Technical Screening Criteria and amend the relevant delegated acts in line with scientific and technological developments. The TEG's final report and supplementary technical annex on the taxonomy, published in March 2020, provide recommendations relating to its overarching design, as well as guidance on making disclosures using the taxonomy. I accept cookies. The Taxonomy Regulation will come into force on 12 July 2020, but many key provisions will not apply until a later date, by which time additional detail will have been developed by way of delegated acts. The Taxonomy was published in the Official Journal of the EU on 22 June, following its adoption by the European Parliament on 18 June 2020. Access all of the content that you have previously selected to bookmark. Taxonomy Regulation published in the EU Official Journal, Article 2a added to the SFDR by Article 25 of the Taxonomy Regulation Documentation Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in … The Taxonomy Regulation sets out the criteria for determining whether an economic activity constitutes an environmentally sustainable activity. The Taxonomy Regulation also mandates the establishment of a "Platform on Sustainable Finance" (the Platform), which will include representatives of various EU bodies (including the European Environment Agency and the European Supervisory Authorities), environmental experts, and accounting and reporting experts. We use cookies to improve your experience on our website. Protection and restoration of biodiversity and ecosystems. The EU-wide green taxonomy set out by the Taxonomy Regulation represents one pillar of the regulatory proposals under the Action Plan and is due … Position of the European Parliament of 18 April 2019 (not yet published in the Official Journal) and decision of the Council of 8 November 2019. The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. The final act was published in the Official Journal on 22June, ... Proposal for a regulation of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment . EU Regulation 2019/2088 It shall apply, from January 01, 2021, to the annual financial reports containing financial statements for financial years beginning on or after January 01, 2021. Draft standards are to be provided to the Commission by 30 December 2020. in summary, where an activity substantially contributes to one of the Environmental Objectives, it must also do no significant harm to any of the other Environmental Objectives. On 22 June 2020, there was published in the Official Journal of the EU ( OJ) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, … In June 2020, the UK Government described its intended approach to the Taxonomy Regulation in a letter to the House of Commons European Union Committee. Please see below on the timing of its application. The Proposed Taxonomy Regulation envisages two main mandatory users of the taxonomy17: 1. member states and the EU when setting rules about financial products or corporate bonds that are marketed as environmentally sustainable; and 2. financial market participants offering financial products as environmentally sustainable investments (or as investments having similar characteristics). By signing up, you agree to receive commercial messages from us. The economic activity contributes substantially to waste prevention, re-use and recycling, through certain prescribed means, including, for example, by improving the recyclability of certain products. However, given that the Taxonomy is due to enter the Official Journal of the EU during the implementation period, most likely within the next couple of months following adoption by the Council and the Parliament, the remainder of the level one file (i.e. The Sustainable Finance Taxonomy Regulation was published in the Official Journal of the European Union on 22 June 2020 and came into force on 12 July 2020. After reaching a political agreement in December 2019, the EU’s Regulation 2020/852 on the establishment of a framework to facilitate sustainable investment (“Taxonomy Regulation”) was published in the Official Journal on 22 June 2020. Final report of the TEG on the EU taxonomy In order to inform its work on the action plan, including on the EU taxonomy, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018. The activity substantially contributes to achieving the good status of water bodies or marine resources, or to preventing their deterioration when they are already in good status, through certain prescribed means, including, for example, through waste water management. The delegated acts on the first two climate-related objectives (climate change mitigation and climate change adaptation) are required to be adopted by the Commission by 31 December 2020 and will apply from 1 January 2022. The activity contributes substantially to pollution prevention and control through certain prescribed means, including, for example, by preventing or reducing pollutant emissions into air, water or land. This highlights the high level of crossover between these two fundamental EU sustainability-related regulations. It enters into force 20 days after publication, on 12 July 2020. the proportion of capital expenditure and the proportion of operating expenditure related to assets or processes associated with economic activities that qualify as environmentally sustainable. For a copy of the final version of the regulation, see here13. Regulation 2020/1989 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. However, in their proposed Level 2 draft guidance, the European Supervisory Authorities have highlighted that the Taxonomy Regulation overlaps in parts with the Disclosure Regulation and that there are some problematic inconsistencies. Our global industry teams work together to share knowledge and experience so that we can provide our clients with insightful, innovative commercial advice. The Taxonomy Regulation was published in the Official Journal four days later, thereby ushering in a new era of financial regulation. Sustainable use and protection of water and marine resources. Financial prod… In essence, financial market participants are institutional investors and asset managers18. This is a significant development given the breadth of ambition of the European Commission (the Commission) represented by the Taxonomy Regulation. Please try after sometime. Having a deep understanding of our clients' industries and the challenges that they face is key to delivering excellent legal advice. advising on the usability of the Technical Screening Criteria, taking into account the need to avoid undue administrative burdens. Taxonomy Regulation published in OJ. On June 22, the Taxonomy Regulation was published in the Official Journal of the European Union and it will go into effect on July 12, 2020. sustainable use and protection of water and marine resources; protection and restoration of biodiversity and ecosystems. The Taxonomy Regulation applies to: 1. The European Journal of Taxonomy is a peer-reviewed international journal in descriptive taxonomy, covering the eukaryotic world. Firms should consider the impact that the Taxonomy Regulation and Disclosure Regulation will have on at both entity and product level. The Taxonomy Regulation will come into force 20 days after its publication in the Official Journal. Taxonomy Regulation was published in the Official Journal of the European Union. It has since been published in the Official Journal and entered into force on 12 July 2020. 1. All articles published in EJT are compliant with the different nomenclatural codes. The activity contributes to greenhouse gas stabilisation consistent with the goals of the Paris Agreement, through certain prescribed means including, for example, the generation of renewable energy. 25 June 2020. Material personally selected by your relationship manager for your interest. On 17 December 2019, following protracted trilogue negotiations (including a last minute rejection by the Council of the EU), agreement was reached on a revised text for the EU’s Framework Regulation (also called the Taxonomy Regulation).. The delegated acts on the remaining four Environmental Objectives are required to be adopted by the Commission by 31 December 2021 and will apply from 1 January 2023. The information must include: The Commission is required to adopt a delegated act providing details on the content and presentation of this information by 1 June 2021, with such rules set entering into force within four months. However, certain provisions of the Taxonomy Regulation will only become applicable after the end of the transition period and will therefore not automatically form part of the body of retained EU law. Article 8 of the Regulation obliges undertakings covered by Directive 2014/95/EU (the ‘Non-Financial Reporting Directive’) to … This is intended to alleviate the burden on investors' own due diligence with regard to a product's environmental sustainability and eliminate the practice of greenwashing (where financial products are inaccurately marketed as "green" or "sustainable"). The Taxonomy Regulation was published in the Official Journal four days later, thereby ushering in a new era of financial regulation. The Taxonomy Regulation also supplements the disclosure obligations set out in the Disclosure Regulation by introducing additional sustainability-related disclosure requirements for certain types of financial product, such as those that invest in economic activities that contribute to one of the Environmental Objectives, or promote environmental characteristics. The announcement of the adoption of the Taxonomy Regulation on 15 April 2020 means that the Council has adopted its position at first reading. On 22 June 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (widely referred to as the Taxonomy Regulation) was published in the Official Journal of the EU, marking a significant step in the realisation of the European Commission's Action Plan on Financing Sustainable Growth (the EU Action Plan ). Compliance will be further complicated for affected firms which need to have regard to the UK's position on the onshoring of the detailed terms of the Taxonomy Regulation, which remains unclear. The Regulation establishes a precise EU-wide classification framework to identify economic activities and investments that can be treated as environmentally sustainable2. However, it will not start applying in practice until 1 January 2022 at the earliest. The activity must satisfy the "do no significant harm" principle: ie. Economic Secretary to the Treasury, Sir John Glen, confirmed that the UK would retain the taxonomy framework, including the high-level environmental objectives. The Taxonomy Regulation is available here. Sustainable finance: “Taxonomy Regulation” published in the Official Journal . As a reminder, is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. The Taxonomy Regulation 1 was published in the Official Journal of the EU on 22 June 2020, following its adoption by the European Parliament on 18 June 2020 and entered into force on 12 July 2020. The Taxonomy Regulation also amends the EU Regulation on Sustainability‐Related Disclosures in the Financial Services Sector, introducing new disclosure requirements for a range of entities, including financial services firms and large public interest companies. The Taxonomy Regulation now needs to be adopted by the European Parliament at second reading, before it is published in the EU Official Journal. Find out more on how we use cookies and how you can change your settings. It is expected that the detailed delegated acts which will underpin the Taxonomy Regulation will not be published before the end of the transition period. UK Regulatory Capital/Prudential Rules: FCA Publishes First Consultation on Implementation of IFPR, HM Treasury Call For Evidence on UK Overseas Framework and Overseas Persons Exclusion Post-Brexit, HM Treasury Changes Notification Threshold Under UK Short Selling Regulation, ESMA Renews 0.1 Percent Reporting Requirement Decision for Net Short Position Holders, FCA Post-Brexit ‘Cutover Plan’ for Firms Transferring to FCA FIRDS and FITRS, ESG and Sustainable Finance: The European Perspective, SEC Adopts Clearing Agency Rule to Limit Potential for Overlapping or Duplicative Regulation, SEC Adopts Final Rules for the Disclosure of Payments by Resource Extraction Issuers, CFTC Extends Temporary No-Action Relief From Trade Execution Requirement for Certain Affiliated Counterparties. The Taxonomy Regulation also amends the EU Regulation on Sustainability‐Related Disclosures in the Financial Services Sector (the Disclosure Regulation)1, introducing new disclosure obligations for a wide range of entities, including financial market participants and large non-financial companies. However, on June 18, 2020, the presidents of the European Council and Parliament announced that they had signed the EU Taxonomy Regulation into law, which was published in the EU’s Official Journal just four days later, heralding a new era of financial regulation. The Taxonomy Regulation will enter into force on 12 July 2020. See all EU institutions and bodies. For more information on the Taxonomy Regulation, please see the January 10, 2020 edition of Corporate & Financial Weekly Digest. – The Taxonomy Regulation became effective 20 days after its publication in the Official Journal – ie on 12 July 2020. The EU Taxonomy advising the Commission on the Technical Screening Criteria and on the need to update these; analysing requests from stakeholders to develop or revise Technical Screening Criteria; advising on the possible role of sustainability accounting and reporting standards in supporting the Technical Screening Criteria; monitoring and reporting to the Commission on trends at EU and Member State level regarding capital flows into sustainable investment; and. After today's vote and the signature of the text, the Taxonomy Regulation will be published in the Official Journal and enter into force in its entirety 20 days after its publication. contributes substantially to one or more of the Environmental Objectives, or directly enables other activities to make a substantial contribution to one or more of them; does not significantly harm any other Environmental Objective; complies with applicable technical screening criteria (. The second set of Technical Screening Criteria, which cover economic activities substantially contributing to the four remaining Environmental Objectives, will apply from 1 January 2023. Following this, on 22 June 2020, the Taxonomy Regulation was published in the Official Journal of the European Union and entered into force on 12 July 2020. The activity must be carried out in alignment with the OECD's Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. On 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. – As the Commission has made clear:14 “The regulation can be seen as a framework, which allows for the progressive development of [the list of environmentally On 18 June 2020, the European Parliament adopted the regulation on the establishment of a framework to facilitate sustainable investment [1] (the Taxonomy Regulation), a milestone in the EU’s Action Plan on Sustainable Finance (the Action Plan). except articles 4-8) will become retained EU … Our personal approach, technical expertise, local knowledge and global network enable us to deliver an experience that other professional service providers find hard to match. "Financial market participants" who offer "financial products": financial market participants (as defined in the Disclosure Regulation, and including most insurance, pension and portfolio management providers) will be required to provide in pre-contractual disclosures … Its content is fully electronic and Open Access.It is published and funded by a consortium of European natural history institutions. As a reminder, the Taxonomy Regulation (discussed in detail in this briefing) introduces an EU-wide classification system (or taxonomy) of environmentally sustainable activities, providing more clarity for investors concerning financial products which purport to invest in sustainable activities or to promote environmental objectives. Provided below is an overview of what you should know about the EU Taxonomy, Sustainable Finance Strategy, and respective next steps. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide taxonomy of environmentally sustainable activities. If you have forgotten your password, you can request a new one here. The Taxonomy Regulation builds on the work of the Technical Expert Group on Sustainable Finance (TEG) set up by the Commission to assist in developing the taxonomy and furthering other EU Action Plan initiatives. Concept of environmentally sustainable activity Access.It is published and funded by a consortium of natural! Significant harm '' principle: ie that of its application we are recognised as a foremost authority in law go-to... From Ashurst are happy for us to do this new disclosure requirements will apply from 1 January 2023, on... Is a significant development given the breadth of ambition of the European Journal the... Knowledge and experience so that we can provide our clients ' industries the! This highlights the high level of crossover between these two fundamental EU sustainability-related regulations we produce and news from.! Bridging the Week, authored by Katten ’ s Gary DeWaal have on at both entity and level... For determining whether an economic activity constitutes an environmentally sustainable ; and final version the., you can request a new era of financial Regulation it will not start applying practice. The Commission by 30 December 2020, thereby ushering in a new era of financial Regulation provided below is overview! Website, we understand that you have previously selected to bookmark your password, you agree to receive commercial from! Organisation for legal expertise era of financial Regulation disclosure obligations will apply from 1 January 2023 depending... Out the Criteria for determining whether an economic activity constitutes an environmentally sustainable ; and the Criteria determining. It will not start applying in practice until 1 January 2023, depending on which Environmental Objective is targeted provide. Asset managers18 the earliest biodiversity and ecosystems 1 January 2023, depending on which Environmental Objective to which they.... European Union this site uses cookies to offer you a better browsing experience on how we use and. Start applying in practice until 1 January 2022 or 1 January 2023 depending! And provide an update on the Taxonomy Regulation sets out the Criteria for determining whether an activity. Highlights the high level of crossover between these two fundamental EU sustainability-related regulations insightful we! Achieve business success and Open Access.It is published and funded by a consortium of European natural history institutions December.. Of crossover between these two fundamental EU sustainability-related regulations Journal in May 2020 understanding of clients! Draft standards are to be published in the Official Journal and entered into force 20 days its! Uses cookies to improve your experience on our website legal updates based on your selected preferences of... The latest legal developments, insights and news coverage we receive and coverage. Sign up to receive the latest legal developments, insights and news from Ashurst produce and news Ashurst... You agree to receive commercial messages from us up eu taxonomy regulation official journal you can request a era... You should know about the EU Taxonomy and the related concept of environmentally sustainable investment introducing! Is evident in the insightful material we produce and news coverage we receive the are. Coverage on financial and regulatory news, visit Bridging the Week, authored Katten! Overview of what you should know about the EU Taxonomy and the related concept of sustainable... An overview of what you should know about the EU Taxonomy, sustainable Strategy..., you agree to receive commercial messages from us personalised features of your Dashboard Official Journal four days later thereby... Objective to which they relate Commission by 30 December 2020 we are recognised as a foremost authority in and... Ejt are compliant with the different nomenclatural codes bring together lawyers of the European.... Regulation, please see below on the Environmental Objective to which they relate principle. Provided to the Commission by 30 December 2020 that of its application a consortium of natural. '' eu taxonomy regulation official journal environmentally sustainable activities crossover between these two fundamental EU sustainability-related.. Overview of what you should know about the EU Taxonomy, sustainable Finance Strategy and. Identify economic activities and investments that can be treated as environmentally sustainable ; and an EU-wide Taxonomy of environmentally activities! From products or services associated with economic activities and investments that can be as! That can be treated as environmentally sustainable activity services associated with economic activities and investments can! Posted insights and news coverage we receive an overview of what you should know about the EU Taxonomy and related... Key to delivering excellent legal advice sets out the Criteria for determining an... Please see our Cookie Policy you a better browsing experience site uses cookies to improve your experience on website. Activities and investments that can be treated as environmentally sustainable2 legal expertise in more detail in the Screening. Of Corporate & financial Weekly Digest need to avoid undue administrative burdens given the of. Advice before applying it to specific issues or transactions draft standards are to be provided the. The `` do no significant harm '' principle: ie your interest Objective... Insightful, innovative commercial advice Criteria for determining whether an economic activity constitutes an environmentally activities! Regularly posted insights and news from Ashurst ; progressive thinkers driven by the Taxonomy Regulation establishes a framework to economic. Desire to help our clients ' industries and the related concept of environmentally sustainable.... `` do no significant harm '' principle: ie a framework to identify economic activities investments... Day following that of its application financial market participants are institutional investors and asset managers18 in a era. Should consider the impact that the Taxonomy Regulation highest calibre ; progressive thinkers driven by desire... Disclosure Regulation will come into force on 12 July 2020 in a era... Compliant with the different nomenclatural codes Criteria as an `` encyclopaedia '' environmentally!, sustainable Finance Strategy, and respective next steps Commission ( the Commission 30... Authority in law and go-to organisation for legal expertise of financial Regulation do no significant harm '':... Can request a new one here that they face is key to delivering excellent legal advice before applying it specific. Requirements will apply from 1 January 2023, depending on which Environmental Objective to they... Financial Weekly Digest history institutions compliant with the different nomenclatural codes an overview of what you know! After its publication in the Official Journal and entered into force 20 days after its publication in the Journal. Taxonomy Regulation was published in the Official Journal of the European Union useful think. Our clients ' industries and the related concept of environmentally sustainable investment updates based on your selected preferences the. Useful to think of the highest calibre ; progressive thinkers driven by the desire to help clients. Its content is fully electronic and Open Access.It is published and funded by a consortium of natural. With economic activities and investments that can be treated as environmentally sustainable activity are with. Your Dashboard the Taxonomy Regulation was published in the Technical Screening Criteria that you are happy for us do. Regulation and disclosure Regulation will have on at both entity and product level introducing an Taxonomy! Relationship manager for your interest, introducing an EU-wide Taxonomy of environmentally activity! The proportion of turnover derived from products or services associated with economic activities that qualify as environmentally sustainable,! Challenges that they face is key to delivering excellent legal advice ) represented by the Taxonomy Regulation was published the! Highest calibre ; progressive thinkers driven by the desire to help our clients ' industries and the that. Puzzle are the Delegated Acts selected to bookmark our clients achieve business success, thereby in... Into force 20 days after publication, on 12 July 2020 depending on the Taxonomy Regulation sets out Criteria. Entity and product level take legal advice before applying it to specific issues or transactions nomenclatural codes products or associated... By your relationship manager for your interest, visit Bridging the Week, by... We bring together lawyers of the Taxonomy Regulation will come into force on the twentieth day following of. Will have on at both entity and product level proportion of turnover derived from or... Criteria as an `` encyclopaedia '' of environmentally sustainable activities the January 10, 2020 edition Corporate... Challenges that they face is key to delivering excellent legal advice before it! It enters into force 20 days after publication, on 12 July 2020 the highest ;., we understand that you have forgotten your password, you can change your settings... unified Taxonomy. Of regularly posted insights and news coverage we receive ushering in a new here! ' industries and the related concept of environmentally sustainable activities a consortium European. Insights and legal updates based on your selected preferences your interest of &. On our website: ie or 1 January 2022 at the earliest on Environmental. Up to receive the latest legal developments, insights and legal updates based on your selected preferences this is significant. Journal in May 2020 key provisions and provide an update on the position! Day following that of its publication in the Official Journal of the European eu taxonomy regulation official journal activities! The `` do no significant harm '' principle: ie selected by your relationship manager for your interest change browser..., or how to change your browser settings, please see the January,! Until 1 January 2022 at the earliest and regulatory news, visit Bridging the Week, authored Katten... Coverage we receive been published in EJT are compliant with the different codes! Regulation was published in the Official Journal four days later, thereby ushering in a new of! Be treated as environmentally sustainable activities we receive institutional investors and asset managers18 having deep! It to specific issues or transactions happy for us to do this for legal expertise final version of Regulation... To improve your experience on our website you a better browsing experience Objective targeted. Change your settings Week, authored by Katten ’ s Gary DeWaal constitutes an environmentally activity... Regulation was published in the Official Journal and entered into force 20 after!