Groups of investors and other stakeholders in Germany and France are pushing ahead with work on social taxonomies, building on the abandoned EU efforts for such an initiative, Responsible Investor can reveal.

The potential for a social taxonomy to establish a comprehensible and shared way of defining what a socially sustainable activity or company was explored by the first iteration of the EU Platform on Sustainable Finance. 

This work culminated in February 2022 when the platform launched a report on what the taxonomy could look like. However, plans to extend the EU taxonomy to cover social objectives were later shelved. 

As recently as last month at the RI Europe conference, Martin Spolc confirmed that the European Commission is not actively considering plans to build one out, saying it would be unwise at this point. He added that social-related elements are included in the EU’s Sustainable Finance Disclosure Regulation (SFDR) and incoming corporate sustainability reporting rules. 

Despite this, it has emerged that stakeholders in both France and Germany are working to keep the plans for a social taxonomy alive.


FIR, the French SIF, along with private equity association France Invest and social impact organisation FAIR, have launched a working group on the social taxonomy for French investors. 

French SIF executive chair Grégoire Cousté told RI: “We know there are lots of differences between countries in terms of how the social side is approached, so it’s very complicated to make a European one. But we want to try to at least define what a social taxonomy for French investors would look like.” 

AXA Investment Managers and La Banque Postale Asset Management told RI that they are part of the working group, while BNP Paribas Asset Management, Mirova and Sycomore Asset Management all expressed their support for the social taxonomy. 

Cousté added that the final goal is still to create a European taxonomy, rather than an individual national one. But in the absence of Commission efforts on this, the group wants to continue the work, including sharing their ideas with other countries and soliciting feedback. 

“There’s a lot of appetite from investors to work on this in the French market,” said Cousté. “On the social pillar in general, we have around 50 people from 40 different investors keen to participate. There’s definitely demand for work on social issues, in France and also across Europe.”

Cousté said the idea is not to start from scratch, but to incorporate the work which has already been done.

“Our former president Thierry Philipponnat was a member of the EU Platform on Sustainable Finance’s sub-group working on the social taxonomy. Not everyone was satisfied with the proposed approaches, but we want to capitalise on the work that was done, rather than re-invent the wheel.” 

The working group should set priorities and a timeline for targets, as well as establish its members, by the autumn.


Germany is also looking to keep the ball rolling on the social taxonomy, said Antje Schneeweiß, managing director at German church investment group Arbeitskreis Kirchlicher Investoren and former rapporteur for the platform’s sub-group focused on extending the EU taxonomy to social objectives. 

She told RI that the multi-stakeholder group of organisations from a range of sectors aims to push the social taxonomy back onto the agenda, and refine the structure and content previously outlined by the platform in its report.  

Some European pension funds have shown interest, she said, and work is underway to get more investors involved. 

Notably, the group has “abandoned” the term social taxonomy and substituted “social framework”, aiming to build on it and link it to existing regulations and definitions. 

Schneeweiß said: “We understand that, when you mention the word taxonomy or social taxonomy in some circles like DG FISMA, the door isn’t just closed, it’s locked.” 

She noted that the SFDR mentions social objectives, but that these are not defined. Social taxonomy discussions could be reframed to say “there’s a gap in the SFDR where we could put in the social framework… alongside suggesting it as a standalone framework”, she added.

The group is putting together a report building on the platform’s work, which will lay out what a “social investment framework” would look like, why it’s needed and how it could be used.

From the group’s perspective – and this was in the platform’s 2022 report – there are two ways to invest socially.

“One is social products and services, like social housing and healthcare, which already has some definitions so we will build on them, and the other is investing in the processes of companies to make them more socially positive like procurement, training, re-organisation of supply chain,” said Schneeweiß.  

Once the report is finished, the group plans to take it to investors to try and get support, ahead of a launch November. It will then be taken to the Commission.

The work in Germany comes as the EU Platform on Sustainable Finance’s current head Helena Viñes Fiestas said the commission made a good judgement call when deciding to drop plans for a social taxonomy for now.  

At RI Europe last month, she said: “If you think the green taxonomy was complex and was the target of a lot of lobbying… I don’t want to be the chair when [a social taxonomy] happens. I think what is really important in terms of S right now is the minimum safeguards, the due diligence directive and that equivalence, and then we can move on.”

However, she did say she hopes one day we have a social taxonomy. “I think social issues are important are as important as environmental.”