EU experts seek feedback on plans for taxonomy to cover biodiversity, blue economy and more

Platform on Sustainable Finance snubs biodiversity offsets in new recommendations

The EU’s team of expert advisors has published its recommendations for expanding the green taxonomy beyond climate change. 

In two documents released yesterday, the Platform on Sustainable Finance (PSF) outlined its preliminary thinking on how Europe’s controversial classification system can be rolled out to capture business activities that support Europe's efforts on biodiversity, waste and pollution prevention, water and marine life, and the circular economy.

The PSF comprises 57 members from civil society, industry and the investment community, and 11 observers. One of its six subgroups is dedicated to developing technical guidance, including the new 1,000+-word text, which explains the priority sectors and technologies to be covered under the expansion. It also identifies the EU’s goals for each objective, and the metrics that could be used to capture alignment. 

“Due to resources, workload and time available, it was considered that the PSF would only be able to address up to about 20 economic activities per environmental objective in the first phase of the work,” the report explained.

Industries addressed include agriculture, fishing, logging, pharmaceuticals, chemicals, manufacturing, energy, civil engineering, real estate, technology, transport and tourism. Other business activities will be included in future iterations of the green taxonomy. 

In yet another snub of corporate offsetting strategies, the authors urge the Commission not to include biodiversity offsets – through which companies fund external conservation projects to compensate for business activities that harm wildlife and natural habitats – in its list of activities that support the EU’s environmental objectives.

“Biodiversity offsets are explicitly excluded because they represent the 'last resort' measures that can be taken to limit any negative impacts on biodiversity following the full application of the mitigation hierarchy,” the report says, adding that such offsets could be linked to the taxonomy’s Do No Significant Harm requirements, but not the core requirement to significantly contribute to green objectives. 

A consultation on the draft recommendations is now open until September 24. Feedback which helps “improve the robustness of the technical screening criteria” will be considered in the creation of a final version, slated to be published in November. The Commission will then take forward the recommendations at its discretion. 

“In line with the taxonomy’s guiding principle of establishing robust, science-based criteria, the call for feedback puts emphasis on providing a clear scientific and technical explanation and rationale as well as supporting evidence (including links to published journals and articles) for any comments made with respect to the proposed technical screening criteria,” the Platform stated.