The Platform on Sustainable Finance (PSF), an advisory group appointed by the European Commission, has released a new draft report outlining proposed modifications to the EU Taxonomy.
According to ESG Today, these changes are designed to simplify and broaden the classification system that helps identify sustainable economic activities crucial for achieving environmental goals.
The EU Taxonomy, integral to the EU Action Plan on Sustainable Finance, categorises economic activities based on their contribution to six environmental objectives and ensures they do no significant harm (DNSH) to others. These objectives encompass climate change mitigation and adaptation, sustainable use of water and marine resources, transitioning to a circular economy, pollution control, and biodiversity protection. The Taxonomy has been partially in effect since 2022, focusing initially on climate-related objectives.
The latest proposals from the PSF respond to feedback from extensive stakeholder engagements, particularly with businesses that have advocated for a more accessible DNSH criteria application. The report introduces potential new activities for inclusion, such as digital services and the mining and smelting of essential metals like lithium, nickel, and copper.
Helena Viñes Fiestas, Chair of the Platform on Sustainable Finance, emphasised the commitment to enhancing the framework’s practicality. “During this period, our priority has been to improve the usability and effectiveness of the Taxonomy and the broader sustainable finance framework,” she stated. “Once the necessary changes have been implemented, the Platform hopes that a future mandate will allow us to focus on incorporating many more activities into the Taxonomy.”
The PSF’s focus on refining the DNSH criteria and expanding the scope of the Taxonomy is expected to facilitate its broader application and acceptance across various sectors, aligning more economic activities with sustainable practices.
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