Green transition, the obligatory way for 2022 companies

Taxonomy and other EU regulations on sustainable finance were at the center of the work of the Forum on Sustainable Finance, analyzing experiences, good practices and critical issues encountered in the concrete application of the European Taxonomy Regulation.

It is a tool to support investment decisions and market transparency, as well as aimed at financing the green transition for the benefit of financial operators and the market itself. As many participants claimed, that represented a valid tool for the classification of sustainable investments in the name of greater transparency and disclosure.

EU Regulation 2020/852 introduced the taxonomy of eco-compatible economic activities into the European regulatory system, i.e. a classification of activities that can be considered ‘sustainable’ based on alignment with the environmental objectives of the European Union and compliance with certain social clauses. It requires companies to publish a series of data on taxonomy-related activities (turnover, investments, operating expenses), which investors can then use to analyze companies on the environmental impact and decarbonization projects. Therefore, the data published by companies represent a tool to support investment decisions, self-assessments with respect to their own risks and climate impacts, and dialogue with investors. The greater availability of information also allows greater transparency of the financial instruments that aim to achieve sustainability objectives.

The effectiveness of European transparency regulations depends on the availability of reliable and comparable data in consistent times, with the entry into force of the taxonomy requirements. At the same time, the reporting of companies must be carried out according to common standards and, in the case of using estimates and data provided by data providers, transparency is needed on the calculation methods to counteract the risk of greenwashing. The Commission’s measures of 2021 indicate to investors and consultants how to integrate assessments on sustainability risks in the selection and monitoring of investments and to take into account the customers’ sustainability preferences in the profiling process.