The efforts to promote a sustainable future have been many, especially in the last decade, with international cooperation at the heart of the climate change fight.
Nonetheless, global efforts have many times proved insufficient, and the necessity to rush the transition into sustainability and circularity is more apparent than ever. In this regard, the European Union has taken a step forward with its European Taxonomy plan.
What once sounded almost idyllic is now becoming a reality with the recent publication of the Regulations 2020/852, which provide the framework that aims to promote sustainable investment once and for all, and which entered into force on the 1st of January.
Highlights of the Taxonomy Regulations
After analyzing the Regulations closely, we have come to highlight several aspects of the document that we believe make the road to sustainability a robust and reliable one:
- First and foremost, we need to understand that the main objective of the taxonomy itself is the standardization of sustainability in the region. Consequently, the recently published regulations constitute the legal framework that is needed to determine whether an economic activity can actually be considered as environmentally sustainable.
- The document emphasizes the importance of technical screening criteria that help determine the conditions and requirements that qualify an activity or product as sustainable. It’s also important to note that such criteria shall vary and adapt to the specificities of each sector, as it is understood that not every sector counts with the necessary technological advancements for sustainability or for sustainable efficiency (e.g. reducing or removing emissions).
- Therefore, the given technical screening criteria shall specify the minimum requirements that make up for a sustainable performance of the economic activity, as well as establishing best practices, standards and methodologies that further specify qualifications for sustainability. In the event that the technical screening criteria carries too much technical complexity for an investor to understand, independent verification by their party will apply.
- The technical screening criteria should also reflect the need to avoid producing greenhouse gas emissions, by reducing them or increasing emission removals and long term carbon storage. In the same page, a methodology to calculate the life cycle of greenhouse gas emissions should be applied, making it widely applicable to promote comparability of emissions within and across sectors. The methodology shall, however, reflect the specificities of the sector.
- We can’t forget to mention that Regulations also apply to education, human health, social work, arts, entertainment and recreation activities, as these activities provide essential services and solutions towards increasing collective resilience of the whole society and they can increase climate literacy and awareness.
- Last, but not least, the need to transition towards circularity is always on the horizon. Efforts to promote the transition to a circular economy should be tailored to each specific sector once again, in order to ensure that economic activities do not lead to inefficiencies or undermine the objective of circularity itself.
- To ensure that the application of Regulations 2020/852 evolves with the technological, market and policy developments, they should be regularly reviewed and where appropriate, amended.
The European road to sustainability
Although this is only the beginning, it is the prime example of the need to standardize and regulate sustainability collectively in an effort, not only to avoid greenwashing, but to understand the urgency of transitioning towards a new and better way of doing things.
We believe many greater things will come after this, but it also true that Europe is setting a path for the world, where regulating the market to ensure the economy’s and society’s sustainable future is possible.
In DoGood we understand that it is people that can make a change and promote collective positive impact on society and the planet. With our SaaS technology we work to help companies include their employees in their sustainability strategy making this collective effort towards a sustainable future a reality.
We work to engage all employees in the achievement of sustainability objectives by activating and tracking their impact, improving the company’s sustainability culture, reputational value and ESG reporting.
If you want to know more about how we work to create a positive social and environmental impact, click here.