The common EU classification system for sustainable economic activities stipulates that only those investments and economic activities that make a significant contribution to achieving environmental goals are ‘green’. The EU's new taxonomy regulation is intended to help achieve the Green Deal targets and create transparency through a standardised system of criteria. Creating more transparency is at the centre of the Taxonomy Regulation. According to the European Commission, the assessment of environmental sustainability is intended to achieve the following: - Capital flows are channelled into ecologically sustainable economic activities - Investor confidence is strengthened, - Green investments are made more transparent and attractive - Investors are protected from greenwashing In addition, the business activity must make a significant contribution to at least one of the six environmental objectives defined by the European Commission, must not harm the other five objectives (‘do not significantly harm’) and must fulfil the social taxonomy (regulations on issues such as bribery, corruption, taxation and fair competition).
Creating more transparency is at the centre of the Taxonomy Regulation. In addition, the business activity must make a significant contribution to at least one of the six environmental objectives defined by the European Commission, must not harm the other five objectives (‘do not significantly harm’) and must fulfil the social taxonomy (regulations on issues such as bribery, corruption, taxation and fair competition).