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EU Taxonomy Delegated Act with technical screening criteria for climate objectives published in OJ and next steps on other taxonomy developments

Taxonomy Climate Delegated Act 

The Delegated Act ("DA") with the technical screening criteria ("TSC") for climate change adaptation and mitigation under the Taxonomy Regulation has been published in the Official Journal of the EU ("OJ") - see here

It will apply from 1 January 2022

The TSC set out the conditions under which an economic activity qualifies as contributing substantially to climate change adaptation or mitigation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives in the Taxonomy.

The climate TSC in the final DA are unchanged from the version adopted by the Commission in April (see here). The DA was subject to scrutiny by the European Parliament and Council for several months but they did not have the power to amend the DA - the Parliament and Council had to either approve or reject it as drafted. 

The main (but not only reason) why it took so long for the DA to be approved and then published in the OJ was because some Member States had very strong views about whether this DA should cover natural gas and nuclear power as well as all the other economic activities. However, the decision on that will follow shortly (see below). 

Other EU Taxonomy developments

TSC for nuclear and natural gas 

The Taxonomy Climate DA does not include TSC for nuclear power or natural gas. 

That will be done through a separate (complementary) DA, which is expected in December 2021 or January 2022

Financing transition activities 

The Commission has also said it will publish a separate "decarbonisation financing initiative" (setting out ways to finance key transition activities such as natural gas) in Q1 2022

TSC for the other 4 environmental objectives 

The Platform on Sustainable Finance ("PSF") is expected to submit its final recommendations to the Commission on the TSC for the other four environmental objectives in the Taxonomy (water, circular economy, pollution prevention & control, and biodiversity & ecosystems) in Q1 2022.

For more information on the PSF's initial recommendations in August, see here.

Taxonomy Article 8 DA 

Article 8 of the Taxonomy Regulation requires undertakings covered by the Non-Financial Reporting Directive (NFRD) to publish information on how and to what extent their activities are associated with economic activities that qualify as environmentally sustainable under the Taxonomy Regulation. 

The Commission adopted a DA in July setting out the content, methodology and presentation of the KPIs that non-financial and financial undertakings are required to disclose under Article 8 (see here). 

That DA was then subject to several months of scrutiny by the European Parliament and Council and is expected to be approved and then published in the OJ in next few days (see here). 

The Commission is also planning to publish a Q&A with guidance on Taxonomy-eligibility reporting by 31 December 2021.

"Significant harm" / "no significant impact" and social taxonomies 

The PSF is expected to publish is final recommendations to the Commission on a "significant harm" (aka brown taxonomy, although the Commission does not favour that term) and "no significant impact" taxonomy, as well as a social taxonomy in Q1 2022. The PSF's final recommendations will feed into a Commission report that is expected to follow in Q1 2022. 

For more information on the PSF's initial recommendations in July, see here.

Guidance on minimum social safeguards 

The PSF has also said it will publish a separate report to clarify how the minimum social safeguards under Article 18 of the Taxonomy Regulation work in practice. That report is expected at the end of 2021 (but may possibly be subject to delay).


sustainable finance, climate change and environment, non-financial corp reporting