On 3 May, ESBG responded to the Commission’s consultation on its new set of EU taxonomy criteria for economic activities that contribute substantially to one or more of the following environmental objectives: sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; protection and restoration of biodiversity and ecosystems

As a background information, the EU Taxonomy is a classification system, establishing a list of environmentally sustainable economic activities. It could play an important role helping the EU scale up sustainable investment and implement the European green deal. The EU taxonomy would provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable.
It is part of the European Green Deal strategy.ESBG has always been supportive of a workable EU Taxonomy. While the technical screening criteria of the taxonomy must remain consistent and encourage capital reallocation towards a sustainable economy, they should be selected so that they may be applied to all relevant financing activities without creating an excessive administrative burden for some players.
In other words, all financial institutions should have the tools at hand to play a vital role in financing the transition to a more sustainable EU economy. Definitions should therefore be clear, and applicable indicators should ensure a sufficient degree of comparability.
Nonetheless, ESBG sees some shortcomings in the Commission’s draft.
Indeed, ESBG is not totally satisfied when it comes to the Green Asset Ratio (GAR). On top of that, ESBG believes that there is a disparity among annexes or criteria. Indeed, there is very little specificity or granularity in some objectives, especially regarding the biodiversity, whereas other annexes are very granular or specific.