EU Taxonomy: the transition to a circular economy
On 30 March 2022, the European Commission’s Platform on Sustainable Finance published its recommendations for technical screening criteria for the EU taxonomy with a focus on four main objectives: the transition to a circular economy, the sustainable use and protection of water and marine resources, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems. The recommendations have been developed with the support of stakeholders’ input and will now feed into the work of the Commission, which is expected to adopt a Delegated Act by the end of 2022. The Commission already adopted a Delegated Act on other key objectives (climate change mitigation and adaptation) in 2021.
The report of the Platform on Sustainable Finance and accompanying annex cover different economic activities, including the manufacturing of plastic packaging goods and of food and beverages, and sets a number of positive and negative criteria against which those activities will be assessed. For instance, the manufacturing of plastic packaging goods will be considered to contribute to the circular economy if it meets criteria related to the use of circular feedstock, to design for recycling and reuse.
WHAT DID YOU MISS?
- 12 July 2020: The EU Taxonomy Regulation entered into force establishing a framework to direct investments towards sustainable activities, with a focus on six environmental objectives (climate change mitigation and adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems).
- 4 June 2021: The first Delegated Act on climate change mitigation and adaptation (climate taxonomy) was adopted by the Commission.
- February 2022: The Platform on Sustainable Finance published a report on the social implications of the taxonomy (social taxonomy), with a focus on the implications that the Taxonomy will have for companies’ workforce.
- March 2022: The Platform on Sustainable Finance presented a report on the extension of the Taxonomy, including a traffic light system which would be applied horizontally to different economic activities to classify them as red (harmful activities), amber (intermediate contribution activities) or green (no significant impact activities).
- By May 2022: The Platform on Sustainable Finance is expected to carry out additional work to supplement its recommendations on some sectors, e.g. the manufacturing of chemical products and pharmaceutical products.