BNP Paribas: EC publishes taxonomy of environmentally sustainable economic activity
BNP Paribas: EC publishes taxonomy of environmentally sustainable economic activity
By Helena Viñes Fiestas, Global Head of Stewardship & Policy at BNP Paribas AM and Member of the Technical Expert Group
The European Commission (‘EC’) has today published the climate part of the EU Taxonomy, a dynamic classification system to help investors and companies identify economic activities that are environmentally sustainable and measure their positive impact.
Developed by the EC’s Technical Expert Group on Sustainable Finance (‘TEG’), the Taxonomy classification tool will be used by the investment industry to help drive capital towards environmental objectives. It is designed to help grow the clean economy of the future by improving the environmental performance of today’s industries, supporting the transition toward a zero carbon economy.
It sets out the technical screening criteria for economic activities that can make a substantial contribution to one of the EU’s six environmental objectives without being detrimental to any of the others. These objectives are:
- climate change mitigation
- climate change adaptation
- sustainable use and protection of water and marine resources
- transition to a circular economy, waste prevention and recycling
- pollution prevention and control
- protection of healthy ecosystems
By providing a consistent framework and defining a common language relating to sustainable financial products, the Taxonomy will help to ensure full transparency around environmental objectives and impact and aims to put an end to greenwashing. It provides financial market participants with access to the relevant information needed to make choices about how to allocate and measure environmental sustainable investments.
BNPP AM welcomes the publication of the Taxonomy as a key development in improving green finance. In our Global Sustainability Strategy, published in March, we committed to measuring and reporting on our green investments, as a percentage of our overall assets under management, according to the definitions contained in the taxonomy.