The EU Taxonomy Regulation, which entered into force on 12 July 2020, introduces an EU-wide taxonomy (or combined glossary and classification system) of environmentally sustainable activities, as well as new disclosure requirements for certain financial services firms and large public interest entities.
In short, the Taxonomy Regulation is intended to provide certain businesses and investors with a common language to identify the extent to which an investment may be considered environmentally sustainable – and more broadly yet, which economic activities can be considered environmentally sustainable (or “green”).
This alert memorandum provides an overview of the Taxonomy Regulation (including as to status, scope and conceptual and technical framework), explores the upcoming regulatory implications of this initiative for European companies (and, in particular, financial sector firms), and provides a comparative analysis of similar regulatory developments in other jurisdictions.