Taxonomy of investments

Environmental objectives

Investments are supposed to meet criteria for one of 6 environmental objectives:

Climate change mitigation;
Climate change adaptation;
Protection of water and marine resources;
Transition to a closed loop economy;
Pollution prevention;
Ecosystems and biodiversity protection with none of the other targets significantly impeded.

A detailed set of technical criteria for individual economic activities has already been adopted for the first two objectives. As for the other four, only regulatory proposals have so far been made.

New challenges for business

One cannot rule out that the obligations related to the taxonomy will be extended in the future to other areas and entities. The intention is also for tax arrangements in Member States to be linked to the principles of the taxonomy, e.g. in terms of tax preferences.

Businesses should therefore already now get ready for the possible implementation of the new regulations for instance by determining whether their activities will comply with the criteria of the taxonomy.

The taxonomy may impose additional reporting obligations, conditions for obtaining financing or provide a basis for tax exemptions.

How can we help you?

MDDP’s Green Tax Team keeps abreast of taxonomy-related regulatory changes. We offer support in preparing a company for the implementation of taxonomy requirements, e.g. for determining the scope of reporting obligations and verifying sustainability criteria.