The EACB considers positively the call for feedback on the usability and fitness for purpose of the taxonomy, promoted by the Sustainable Finance Technical Expert Group (TEG).
EACB Members believe the Taxonomy will provide a useful starting point to give indication of what economic activities should be considered environmentally sustainable. The progressive approach chosen by the TEG – the identification of macro-sectors for climate mitigation based on GHG emissions, followed by the selection of economic activities expected to make a substantial contribution to climate mitigation – is adequate. We welcome the preference for a modular approach applicable to each of the selected sustainable activities, with the same fields and type of information and focused on some measurable objectives, metrics, principles and rationale.
We would also highlight that, according to the “Taxonomy regulation proposal”, the taxonomy will not be a mandatory list of activities in which to invest and, even funds targeting environmental objectives will not be limited to investing only in taxonomy-compliant activities. Therefore, the voluntary use, by investment firms and credit institutions, of a clear and usable taxonomy will be crucial to mobilize finance for sustainable growth.
However to be able to classify an economic activity according to the taxonomy will represent a significant challenge, since the classification is not aligned with other existing framework. Even though the taxonomy provides modular information with metrics, objectives and principles, there is significant room for interpretation and the need for an individual assessment and monitoring process of activities.
In conclusion, the EACB underlines that the applicability of such taxonomy will require, at least, significant investments, in both quantitative and qualitative assessment process, and information and communication systems (ICT) to identify if an economic activity is sustainable or not. Several tasks will be involved in implementing the taxonomy and integrating it with other systems used by credit institutions. Continuous maintenance will also be necessary, both updating the taxonomy, and classifying new information on activities, as it is added.