The European Commission adopted today a Delegated Act for an EU list of financial investments to be officially recognised as sustainable – commonly known as ‘taxonomy’ .
With this document, the Commission opens the door to industrial logging as well as bioenergy activities with no environmental safeguards to be considered as sustainable, bowing to pressure from Finland, Sweden and their industry lobbies. This decision goes against the ample scientific evidence showing that bioenergy and mainstream forest management practices increase climate change and biodiversity loss, and act against the much-needed transition to a circular economy.
In addition, the Commission’s proposal does not rule out the possibility of fossil fuels and nuclear being considered as green at a later stage. In an attempt to avoid the blocking of the Act by several member states, the Commission plans to address highly problematic energy sources such as fossil gas and nuclear after the summer. This is all but a win for the planet, and simply delays the decision to include even more harmful activities into the green taxonomy.
In its current form, the EU taxonomy fails to protect nature, and will fail to drive sustainable investment. It was conceived as a tool to bring transparency to financial markets and help investors channel their money into environmentally sustainable activities. Instead, it opens the door for harmful investments to be labelled as ‘green’.
Mathilde Crêpy, Senior Progamme Manager at ECOS, said:
‘The taxonomy as adopted today opens the door to massive greenwashing for activities destroying nature. A science-based taxonomy has the potential to incentivise financial markets to help deliver on the just agreed EU target of at least 55% GHG reductions by 2030. This taxonomy will fail to channel money in support of EU climate ambition’.