Taxonomy advisory group chief sees ‘nothing sinister’ in EU’s actions

The head of the EU’s taxonomy expert advisory panel has defended the group’s processes following allegations of political interference by the European Commission (EC).

It comes after five of the group’s member NGOs staged a mass walkout, accusing the Commission of interfering in the group’s work and acting against scientific evidence. The organisations are the European Consumer Organisation (BEUC), BirdLife Europe & Central Asia, Environmental Coalition on Standards (ECOS), Transport and Environment (T&E) and the WWF European Policy Office.

A sixth NGO, ChemSec, resigned earlier this year after criticising the EU’s decision to reclassify nuclear and gas energy as sustainable activities under the EU taxonomy.

The NGOs were formerly members of the high-profile Platform on Sustainable Finance (PSF), an independent advisory body set up to assist future development of the EU’s flagship green taxonomy, which is due to be reappointed later this year. The body’s autonomy and freedom to develop its advice are seen as essential features of the taxonomy’s science-based approach, which is protected by EU law.

The resignations came a month before the PSF is due to hold its final meeting in October.

Responsible Investor previously reported that PSF members had allegedly come under pressure from the EC to withhold publication of environmental criteria and to table more favourable advice.

PSF chief Nathan Fabian declined to address the interference allegations but described frank two-way engagement with the Commission as integral to greening EU policy.

“I think one of the advantages of the platform is the way it’s been set up to work across the different EU departments,” he said. “This type of exchange is exactly what we need to progress the gaps between regulatory environment and our environmental and social goals. It’s a strength rather than a weakness.

“The truth is that the Commission itself is going through a learning process about doing this kind of work. We shouldn’t be surprised that when Commission departments come to taxonomy discussions for the first time, there is some pushback on the extent of industry adjustments needed based on the implications of environmental science.”

Fabian gave the example of the taxonomy’s biodiversity requirements, which are at odds with the integrated benefits model currently used to judge forestry practices and processes in other areas, such as agriculture. Reconciling the two presents an inevitable challenge, he said.

“Whether we like it or not, the platform was created by a political process. It is to be expected that political institutions are going to make decisions about how much of the environmental science evidence they can handle in their policies. There are also differences of opinion when it comes to the science. Does this mean that something sinister is going on? Actually, it doesn’t.”

More broadly, outgoing PSF members say the taxonomy has become a “tool to promote greenwashing” after the loosening of criteria around forestry and bioenergy, in addition to nuclear and gas. “After years spent trying to build it, now it’s the time to campaign and convince investors not to follow it,” said a former representative.

Fabian said that, while he understood concerns around recent political decisions made by the Commission, “this doesn’t mean we should stop the process”.

“If there’s one area I disagree with the NGOs, it is that the market needs a taxonomy because it needs an environmental benchmark to measure and report against,” he said. “Where I agree with the NGOs is that we must constantly work to improve and refine criteria to align with the environmental science.”

Separately, PSF members reported feelings of burnout and mental exhaustion due to the group’s demanding workload. All of the platform’s permanent members are appointed on a voluntary basis and do not receive compensation.

Fabian confirmed that the work “had proven to be quite challenging for some members”, especially those splitting their time between the PSF and an executive or senior role within their own organisations. “This does put some pressure on the voluntary model,” he said.

In addition to his role as chair, Fabian is the current chief responsible investment officer for global investor body the Principles for Responsible Investment.

The Commission is expected to provide details the for the next iteration of the PSF, the so-called Platform 2.0, and solicit applications in the coming weeks. Fabian declined to comment on his future involvement in the PSF pending the proposals.