On June 13th, the Commission unveiled a fresh set of measures designed to ensure the continued support of the EU sustainable finance framework for companies, while also encouraging private investment in transition projects and technologies. These new regulations aim to benefit not only companies that already boast strong sustainability records but also those at various stages of their sustainability journey, provided they have credible plans or targets for improving their sustainability performance.
What are the new measures? EU Taxonomy – Additional Activities: The taxonomy serves as a tool for market transparency, guiding investments toward economic activities that are crucial for a green transition. To this end, the Commission has introduced a new set of EU Taxonomy criteria, outlined in the Taxonomy Delegated Acts, specifically targeting economic activities that make significant contributions to one or more non-climate environmental objectives, with a particular focus on the manufacturing and transport sectors.
EU Taxonomy Disclosures Delegated Act: The Commission has made amendments to this act to provide clearer guidelines on disclosure obligations for the additional activities.
Environmental, Social, and Governance (ESG) Rating Providers: The Commission has proposed a Regulation aimed at enhancing the reliability, comparability, and transparency of ESG ratings activities. ESG ratings provide assessments of the environmental, social, and governance characteristics of companies.
EU Taxonomy User Guide: The Commission has also published a user guide to the taxonomy, intended for non-experts. This guide seeks to improve the usability of the rules and provide support to stakeholders during implementation.
When will these measures take effect? Once the EU Taxonomy Delegated Acts are available in all official languages of the EU, they will be adopted and transmitted to the European Parliament and the Council for scrutiny. If there are no objections during the four-month scrutiny period, the acts will become applicable starting from January 2024.
Opportunity or new obligations? The new package does not impose any new obligations. On the contrary, companies that comply with the requirements can gain access to improved financial opportunities.
How can I determine if my company is included? There are 12 new activities across 6 sectors, along with updates to existing activities.
If you are a manufacturer, you will need to consult Annex II to ascertain whether your company meets the technical screening criteria. These criteria determine whether an economic activity substantially contributes to the transition to a circular economy and whether it causes no significant harm to other environmental objectives. Specifically, if your company manufactures electrical and electronic equipment for industrial, professional, and consumer use, your activity will be included only if it adheres to the established criteria. According to the Annex, you must demonstrate that your product is designed for durability, repairability, and guarantee, as well as for reuse, remanufacturing, dismantling, and recyclability. Furthermore, proactive substitution of hazardous substances, provision of customer information, and participation in an extended producer responsibility scheme are also required.