The European Commission has published a set of frequently asked questions (FAQs) to support stakeholders in the implementation of the EU taxonomy, a classification system for sustainable economic activities. The publication, which aims to make the taxonomy easier to use, is part of the Commission’s simplification agenda and its effort to reduce the administrative burden on companies applying the EU sustainable finance framework.

The FAQs provide technical clarifications regarding various elements of the EU taxonomy. Among other things, they cover the application of general taxonomy requirements and technical screening criteria for specific activities included in the Taxonomy Climate and Environmental Delegated Acts. They also address the generic ‘do no significant harm’ (DNSH) criteria that ensure that economic activities contributing to one of the environmental objectives set out in the Taxonomy Regulation do not cause significant harm to any of the other environmental objectives. Moreover, the FAQs clarify the reporting obligations for activities covered by the Climate Delegated Act and the Environmental Delegated Act.

Commissioner for Financial Services, Financial Stability and Capital Markets Union, Mairead McGuinness, said: “The EU taxonomy provides investors with a common understanding of the environmental impacts of their investments while guiding companies’ sustainable transition efforts. Our focus now is to improve the usability of the framework and these FAQs will help companies as they apply the taxonomy”.

The EU taxonomy is a cornerstone of the EU’s sustainable finance framework and an important market transparency tool. It helps direct investments to the economic activities most needed for the transition, in line with the European green deal objectives. More information on the EU taxonomy can be found on the Commission’s website as well as on the EU taxonomy navigator and on this factsheet about the framework’s uptake on the ground.

Download the frequently asked questions on the EU taxonomy