EU: Coalition of NGOs, shareholder associations & sustainable investment associations call for planned sustainable taxonomy to be “rooted in climate and environmental science”
"EU Taxonomy Delegated Acts 'Ignore Scientific Advice'", 15 Dec 2020
A coalition of NGOs, shareholder associations and sustainable investment associations has called for the European Commission’s (EC) planned sustainable taxonomy to be “rooted in climate and environmental science”.
In response to a consultation on the draft delegated acts (DA) that provides much of the initial detail for the Sustainable Finance Taxonomy Regulation, the 130-strong group said the current text “ignored or weakened the Technical Expert Group’s (TEG) scientific advice for several activities”.
The TEG was a group of 35 experts asked by the EC to provide technical input into the classification and methodologies to support its legislative proposals for sustainable finance. The group commenced its work in July 2018.
“Investors and civil society deserve clarity on what is effectively contributing to climate change mitigation and adaptation, and what is not. This is why it is paramount that the EU Taxonomy remains science-based and insulated from political pressure. The draft DA departs from the TEG’s recommendations – for instance, by including all biogas and by contradicting the Commission’s own assessment on bioenergy,” Maria van der Heide, ShareAction’s Head of EU Policy, told ESG Investor.
The European Union’s (EU) taxonomy, which will be implemented from 2022, aims to funnel more investments into sustainable companies and projects, by clarifying and identifying what can be included in a green investment vehicle, in order to encourage a faster transition to a low carbon economy.
Included in the 10 key areas for improvement highlighted by the coalition is the recommendation for mitigation thresholds to be tightened at least every five years, as proposed by the TEG. “Mid-stream oil and gas is also excluded and should not be reincluded,” the coalition said...
In an open letter to the Commission on December 3, 123 scientists from 27 countries said the Taxonomy Regulation has made a “critical oversight” by omitting certain TEG suggestions, which would undermine the EU’s target to reach net-zero greenhouse gas emissions by 2050...
The Taxonomy Regulation is only one element of the EU’s transparency regime, and will operate in tandem with the Sustainable Finance Disclosure Regulation (SFDR) and the Non-Financial Reporting Directive (NFRD)...
Separately, the Alliance for Corporate Transparency today issued recommendations for the reform of the NFRD to improve the comparability and relevance of corporate disclosures...