The European Commission’s Technical Expert Group on Sustainable Finance has published two landmark reports on March 9. Natixis Green and Sustainable Hub is currently thoroughly analysing these documents as it had done with earlier versions from the TEG. So, stay tuned, next edition of a Month in Green and GSH publications will provide you in depth analysis of the EU milestone for sustainable finance.
Main facts on the documents:
These two awaited documents provide essential additional guidance to market participants on the use of the proposed future EU Green Bond standard and on the EU’s classification of green economic activities.
The Final report on the EU taxonomy provides changes to the Taxonomy since the political agreement in December 2019 and following an extensive consultation process. It explains the climate adaptation activities with detailed implementation guidance including on the “do no significant harm” (DNSH) criteria and on the minimum safeguards in the Taxonomy Regulation. It also details how companies and financial institutions can make disclosures on their Taxonomy aligned economic activities and investments.
The report is supplemented by a 591 pages Technical Annex with screening criteria for 70 climate change mitigation and 68 climate change adaptation economic activities. Included are the criteria for pollution prevention and control, use and protection of water and marine resources, circular economy, and protection and restoration of biodiversity and ecosystems.
The Usability guide for the EU Green Bond Standard (EU GBS) details the use of the proposed standard focusing especially on defining projects aligned with the Taxonomy, the content of the GB Framework and reporting requirements and templates, as well as the proposed setup of an interim registration scheme for the verifiers (external reviewers) of the EU GBS.
The Commission is now due to adopt the classifications for climate change mitigation and climate change adaptation in the form of Delegated Acts by the end of 2020, as set out in the Taxonomy Regulation. A public consultation will be initiated to define the final set up of the EU GBS. This week, the Commission organises a web-based presentation on the final reports.