EU Platform on Sustainable Finance
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Last update : January 2022
The EU Platform on Sustainable Finance assists the EU Commission in developing its sustainable finance policies, notably the further development of the EU taxonomy.
The platform is an advisory body to the Commission. Its main purpose is to advise the European Commission on several tasks and topics related to further developing the EU taxonomy and support the Commission in the technical preparation of delegated acts, in order to implement the EU taxonomy.
The Platform brings together world leading sustainability experts across all stakeholder groups: Private stakeholders from financial, non-financial and business sectors, NGOs and civil society, academia and think tanks, as well as public and international institutions.
As of January 2022, in total the Platform draws on the expertise of 57 members and 11 observers.
The members and observers started work on four main tasks:
- Advise the Commission on the technical screening criteria for the EU taxonomy, including on the usability of the criteria
- Advise the Commission on the review of the Taxonomy Regulation and on covering other sustainability objectives, including social objectives and activities that significantly harm the environment
- Monitor and report on capital flows towards sustainable investments
- Advise the Commission on sustainable finance policy more broadly
Why it matters
The EU taxonomy is a classification system, establishing a list of environmentally sustainable economic activities.
The EU Taxonomy Regulation was published on 22 June 2020 and entered into force on 12 July 2020.
Under the Taxonomy Regulation, the Commission had to come up with the actual list of environmentally sustainable activities by defining technical screening criteria for each environmental objective through delegated acts.
As the development of taxonomies and progressive harmonization is being promoted, the next developments in the EU taxonomy may have an important influence worldwide
Other markets, including Canada, Japan, Malaysia, Singapore, ASEAN at large, and the UK, among others, are in different stages of consultation and evaluation to establish their own taxonomies.
The Central Banks and Supervisors’ Network for Greening the Financial System (NGFS) has called to develop and adopt taxonomies.
Announced in October 2020, the International Platform on Sustainable Finance (IPSF) established a working group, co-led by the EU and China, to work toward a “common ground taxonomy” to identify the commonalities between different jurisdictional taxonomies and seek to support the scale up of cross-border green investments.
Recommendations of the EU Platform on Sustainable Finance will influence future developments in green taxonomies
The Platform on sustainable finance is tasked with advising the European Commission on further developing the EU taxonomy, exploring its expansion to social objectives, activities that significantly harm the environment or activities that are neutral towards the environment.
Main areas of work related to climate mainstreaming:
Four subgroups are currently operating to prepare the technical work.
Two additional subgroups are envisioned in the future.
+ Subgroup 1: Technical Working Group
+ Subgroup 2: Subgroup on regulation review
+ Subgroup 3: Subgroup on negative and low impact activities
+ Subgroup 4: Subgroup on social taxonomy