EU taxonomy for sustainable activities

The EU taxonomy for sustainable activities (ie. "green taxonomy") is a classification system established to clarify which investments are environmentally sustainable, in the context of the European Green Deal.^[1] The aim of the taxonomy is to prevent greenwashing and to help investors make greener choices.^[2] Investments are judged by six objectives: climate change mitigation, climate change adaptation, the circular economy, pollution, effect on water, and biodiversity.^[1] The taxonomy came into force in July 2020.^[2] The taxonomy is seen as the most comprehensive and sophisticated initiative of its type; it may inspire other countries to develop their own taxonomies or may indeed become the world's 'gold standard'. However when the disclosure regime comes into effect in January 2022 there will still be huge gaps in data and it may be several years before it becomes evident whether it will be effective. The UK is working on its own separate taxonomy.^[3]

The classifications of fossil gas and nuclear energy are controversial.^[4] The European Commission asked its Joint Research Centre to assess the environmental sustainability of nuclear. The results will be investigated for three months by two expert groups before the Commission makes a decision on the classification.^[1] Natural gas is seen by some countries as the bridge between coal and renewable energy, and those countries argue for natural gas to be considered sustainable under a set of conditions.^[5] In response, various members of the expert group that advises the European Commission threatened to step down. They stated they see inclusion of gas as a contradiction to climate science, as methane emissions from natural gas form are a significant greenhouse gas.^[4][6]

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