12 November 2020

How green is your money? Bells ring in Brussels as ‘fight’ to set an official list of sustainable investments starts

ECOS was selected as one of the 50 members of a new Platform on Sustainable Finance created by the European Commission in October. For the next two years, we will offer advice to the European Commission on green finance issues as the EU scales up its ambitions for regulation in this field.

Only 50 organisations are part of the Platform on Sustainable Finance, which will advise the European Commission on ‘green finance’ issues as policymakers are immersed in developing a new EU sustainable finance policy framework.

The selection process was highly competitive: more than 500 organisations applied, of which only 10% were chosen to be part of this important group of experts. ECOS was one of them. The final list was published on 1 October and includes representatives of industry, NGOs, financial institutions, researchers, and think tanks.

Visual overview of the EU Action Plan: Financing Sustainable Growth Source: European Commission.


The European Commission seeks to provide a common definition of what ‘sustainable’ means in the finance world. To do so, experts are tasked to develop a list (‘taxonomy’) of economic activities and investment categories contributing to a protected environment and a sustainable society.

As laid down in the EU Taxonomy Regulation, the group is also expected to help the Commission gain a broader understanding of sustainable finance policies and will offer advice on how to better consider sustainability objectives, including social goals (‘social’ taxonomy) and activities that significantly harm the environment (‘brown & grey’ taxonomy). Experts will also monitor and produce regular reports on capital flows into sustainable investments.

How will experts decide which activities to add to the ‘green taxonomy’ list?

Most platform members will work on developing the ‘green taxonomy’. The resulting list of ‘green’ economic activities selected will need to substantially contribute to:

  • Our transition to a circular economy
  • Sustainable use and protection of water and marine resources
  • Pollution prevention and control
  • Protection and restoration of biodiversity and ecosystems, while not causing significant harm to the environment in any other way.

At ECOS, we intend to use our expertise on sustainable product policies to help draw the list of circular activities. As part of our top priorities, we will:

  • Highlight and identify reuse strategies in economic activities
  • Ensure that circularity performance levels are properly considered for each recovery technique. Priority should be given to the reuse of materials over recycling and other ‘end-of-pipe’ activities.
  • Make sure that substances of concern are given significant importance – these elements pose a serious barrier to the development of a true circular economy.

The platform will also explore whether this taxonomy can be extended to economic activities causing harm to the environment, and to those promoting social inclusion and wellbeing.

Why do we need a ‘green taxonomy’?

A comprehensive classification of investments would enable companies and private investors to better understand the impact of their activities on the environment and society. The green finance sector is growing quickly, but it still represents but a small part of all private investments. Creating a defined selection of ‘brown’ and ‘grey’ investments is expected to encourage investors to turn away from polluting activities.

This classification is only the first step. In the long run, companies and investors will be required to disclose how ’green’ their portfolios really are according to the new taxonomy.

The list will in no case hinder the freedom of economic operators. Investors will remain free to buy any stocks they wish, and companies can continue carrying out any activity they choose. What lawmakers intend is to create a legal basis to compare different kinds of investments. This can be used, for example, to define which products banks can advertise as climate friendly.  

Discussions within the platform will not be easy. On the one hand, some experts involved in this work are in favour of a classification strongly based on environmental science, while others defend the interests of well-established businesses. This dialectical fight has already started: gas companies are requesting to be labelled as ‘green’, and incineration industries are asking that waste recovery be included in the taxonomy (even though incineration is often a high emission activity as it diverts valuable materials from repurposing and recycling streams, hindering our transition to a circular economy).

Why is this platform being created only now?

This is not the first time that the European Commission seeks expert advice on green finance activities. The platform takes the baton from the ‘Technical Expert Group’ on sustainable finance (TEG), which published a list of 70 climate friendly economic activities in March 2020.

Based on this input, in early 2021 the Commission plans to adopt a list of economic activities substantially contributing to climate change mitigation or adaptation, a document expected to be in force by the end of 2021. From then on, investors will be obliged to disclose the environmental performance of their portfolio by indicating what percentage of their assets can be included in the ‘green’ list.

Both the TEG group and the new platform are part of the Action Plan on Financing Sustainable Growth, presented by the Commission in 2018.

At ECOS, we are very much looking forward to taking part in this work and will continue making sure that the environmental NGO voice is duly heard.

ECOS is co-funded by the European Commission and EFTA

Website by