The Taxonomy Regulation will enter into force on 12 July 2020, so it will be fully in effect before the Brexit transition period ends (i.e., midnight GMT on 31 December 2020). The Taxonomy Regulation will come into force during the transition period, and will therefore form part of the body of retained EU law at the end of such period. On June 22, the Taxonomy Regulation was published in the Official Journal of the European Union and it will go into effect on July 12, 2020. It enters into force 20 days after publication, on 12 July 2020. Taxonomy Regulation published in OJ. On 31 January 2020, the United Kingdom officially left the EU and entered a transition period which will last until 31 December 2020 (unless extended). ... unified EU taxonomy and the related concept of environmentally sustainable investment. the proportion of turnover derived from products or services associated with economic activities that qualify as environmentally sustainable; and. Sustainable use and protection of water and marine resources. We set out below a brief recap of the Taxonomy Regulation key provisions and provide an update on the UK position. Restructuring, Insolvency & Special Situations, Ashurst advising Brighte on its A$100 million Series C capital raise, Ashurst advises Lendi on merger with Aussie Home Loans, Ashurst advises Pacific Aegis Capital Management on HK$300 million refinancing loan to HNA Group, Establishment of a Framework to Facilitate Sustainable Investment. Taxonomy Regulation was published in the Official Journal of the European Union. On 22 June 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (widely referred to as the Taxonomy Regulation) was published in the Official Journal of the EU, marking a significant step in the realisation of the European Commission's Action Plan on Financing Sustainable Growth (the EU Action Plan ). The activity includes adaptation solutions that substantially reduce the adverse impact (or the risk thereof) of the current and expected future climate on either (i) other people, nature or assets or (ii) the economic activity itself, in each case without increasing the risk of an adverse impact on other people, nature and assets. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide taxonomy of environmentally sustainable activities. the proportion of capital expenditure and the proportion of operating expenditure related to assets or processes associated with economic activities that qualify as environmentally sustainable. In line with these recommendations, the Taxonomy Regulation recognises six distinct environmental objectives (Environmental Objectives): Under the Taxonomy Regulation, an economic activity constitutes an environmentally sustainable activity if it: The Technical Screening Criteria will be built up gradually over time through delegated acts supplementing the Taxonomy Regulation, and will be used to determine whether an economic activity can be considered sustainable. UK Regulatory Capital/Prudential Rules: FCA Publishes First Consultation on Implementation of IFPR, HM Treasury Call For Evidence on UK Overseas Framework and Overseas Persons Exclusion Post-Brexit, HM Treasury Changes Notification Threshold Under UK Short Selling Regulation, ESMA Renews 0.1 Percent Reporting Requirement Decision for Net Short Position Holders, FCA Post-Brexit ‘Cutover Plan’ for Firms Transferring to FCA FIRDS and FITRS, ESG and Sustainable Finance: The European Perspective, SEC Adopts Clearing Agency Rule to Limit Potential for Overlapping or Duplicative Regulation, SEC Adopts Final Rules for the Disclosure of Payments by Resource Extraction Issuers, CFTC Extends Temporary No-Action Relief From Trade Execution Requirement for Certain Affiliated Counterparties. For additional coverage on financial and regulatory news, visit Bridging the Week, authored by Katten’s Gary DeWaal. The delegated acts on the remaining four Environmental Objectives are required to be adopted by the Commission by 31 December 2021 and will apply from 1 January 2023. However, the disclosure requirements of the Taxonomy Regulation will only enter into force once relevant delegated acts have also been published in the Official Journal. We bring together lawyers of the highest calibre with the technical knowledge, industry experience and regional know-how to provide the incisive advice our clients need. The Regulation establishes a precise EU-wide classification framework to identify economic activities and investments that can be treated as environmentally sustainable2. Protection and restoration of biodiversity and ecosystems. The Taxonomy Regulation imposes additional requirements on large public interest entities (including credit institutions and insurance companies) which are subject to requirements under the EU Non-Financial Reporting Directive.2  The new requirement, which will apply from 1 January 2022 or 1 January 2023 depending on the Environmental Objective, is for any such entity to include in its non-financial statements or consolidated non-financial statements information on how and to what extent its activities are associated with economic activities that qualify as environmentally sustainable under the Taxonomy Regulation. The regulation now needs to be adopted by the European Parliament at second reading before it can be published in the Official Journal and enter into force. The activity must satisfy the "do no significant harm" principle: ie. It enters into force 20 days after publication, on 12 July 2020. Position of the European Parliament of 18 April 2019 (not yet published in the Official Journal) and decision of the Council of 8 November 2019. Sustainable finance: “Taxonomy Regulation” published in the Official Journal . Directive 2013/34/EU. The new disclosure obligations will apply from 1 January 2022 or 1 January 2023, depending on the Environmental Objective to which they relate. The delegated acts on the first two climate-related objectives (climate change mitigation and climate change adaptation) are required to be adopted by the Commission by 31 December 2020 and will apply from 1 January 2022. The PDF server is offline. For more information on the Taxonomy Regulation, please see the January 10, 2020 edition of Corporate & Financial Weekly Digest. is carried out in compliance with certain safeguards. sustainable use and protection of water and marine resources; protection and restoration of biodiversity and ecosystems. "Financial market participants" who offer "financial products": financial market participants (as defined in the Disclosure Regulation, and including most insurance, pension and portfolio management providers) will be required to provide in pre-contractual disclosures … The EU Taxonomy 2. By signing up, you agree to receive commercial messages from us. On 17 December 2019, following protracted trilogue negotiations (including a last minute rejection by the Council of the EU), agreement was reached on a revised text for the EU’s Framework Regulation (also called the Taxonomy Regulation).. The second set of Technical Screening Criteria, which cover economic activities substantially contributing to the four remaining Environmental Objectives, will apply from 1 January 2023. In June 2020, the UK Government described its intended approach to the Taxonomy Regulation in a letter to the House of Commons European Union Committee. Compliance will be further complicated for affected firms which need to have regard to the UK's position on the onshoring of the detailed terms of the Taxonomy Regulation, which remains unclear. The Taxonomy Regulation will come into force 20 days after its publication in the Official Journal. The Taxonomy Regulation will enter into force on 12 July 2020. However, in their proposed Level 2 draft guidance, the European Supervisory Authorities have highlighted that the Taxonomy Regulation overlaps in parts with the Disclosure Regulation and that there are some problematic inconsistencies. 1. The Taxonomy Regulation now needs to be adopted by the European Parliament at second reading, before it is published in the EU Official Journal. For more information on how we use cookies, or how to change your browser settings, please see our Cookie Policy. Provided below is an overview of what you should know about the EU Taxonomy, Sustainable Finance Strategy, and respective next steps. A virtual library of regularly posted insights and legal updates based on your selected preferences. The final piece of the puzzle are the Delegated Acts. As a reminder, is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. On 18 June 2020, the European Parliament adopted the regulation on the establishment of a framework to facilitate sustainable investment [1] (the Taxonomy Regulation), a milestone in the EU’s Action Plan on Sustainable Finance (the Action Plan). It also introduces a requirement for "non-sustainable" products to include a statement confirming that the investments underlying the product do not take into account the EU criteria for environmentally sustainable economic activities. The Taxonomy Regulation also accommodates activities for which there is no technologically and economically feasible low-carbon alternative but which nevertheless support the transition to a climate-neutral economy in a manner consistent with a pathway to achieving the Paris Agreement goal of limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels. in summary, where an activity substantially contributes to one of the Environmental Objectives, it must also do no significant harm to any of the other Environmental Objectives. On 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. As a reminder, the Taxonomy Regulation (discussed in detail in this briefing) introduces an EU-wide classification system (or taxonomy) of environmentally sustainable activities, providing more clarity for investors concerning financial products which purport to invest in sustainable activities or to promote environmental objectives. See all EU institutions and bodies. Find out more on how we use cookies and how you can change your settings. This is evident in the insightful material we produce and news coverage we receive. The Taxonomy Regulation will come into force on 12 July 2020, but many key provisions will not apply until a later date, by which time additional detail will have been developed by way of delegated acts. The Taxonomy Regulation is available here. 25 June 2020. The Taxonomy Regulation applies to: 1. All articles published in EJT are compliant with the different nomenclatural codes. Taxonomy Regulation published in the EU Official Journal, Article 2a added to the SFDR by Article 25 of the Taxonomy Regulation Documentation Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in … This site uses cookies to offer you a better browsing experience. Context and objectives . The activity contributes substantially to protecting, conserving or restoring biodiversity and to achieving the good condition of ecosystems, or to protecting ecosystems that are already in good condition, through certain prescribed means, including, for example, sustainable land use and management. The economic activity contributes substantially to waste prevention, re-use and recycling, through certain prescribed means, including, for example, by improving the recyclability of certain products. By continuing to use our website, we understand that you are happy for us to do this. EU Regulation 2019/2088 The announcement of the adoption of the Taxonomy Regulation on 15 April 2020 means that the Council has adopted its position at first reading. The final act was published in the Official Journal on 22June, ... Proposal for a regulation of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment . However, he confirmed that, as the details to be set out in the future delegated acts will not be known in advance of the end of the transition period, the UK government would not commit at this stage to confirm the extent to which UK law will align with EU law in this area thereafter. The information must include: The Commission is required to adopt a delegated act providing details on the content and presentation of this information by 1 June 2021, with such rules set entering into force within four months. The Taxonomy Regulation also amends the EU Regulation on Sustainability‐Related Disclosures in the Financial Services Sector, introducing new disclosure requirements for a range of entities, including financial services firms and large public interest companies. However, it will not start applying in practice until 1 January 2022 at the earliest. The Taxonomy Regulation was published in the Official Journal four days later, thereby ushering in a new era of financial regulation. The Taxonomy Regulation also amends the EU Regulation on Sustainability‐Related Disclosures in the Financial Services Sector (the Disclosure Regulation)1, introducing new disclosure obligations for a wide range of entities, including financial market participants and large non-financial companies. We are recognised as a foremost authority in law and go-to organisation for legal expertise. The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Its content is fully electronic and Open Access.It is published and funded by a consortium of European natural history institutions. Access all of the content that you have previously selected to bookmark. Our personal approach, technical expertise, local knowledge and global network enable us to deliver an experience that other professional service providers find hard to match. The implications Apart from providing classification criteria for environmentally sustainable activities, the taxonomy introduces amendments to the recently introduced Disclosure Regulation on sustainability‐related disclosures in the financial services sector. Having a deep understanding of our clients' industries and the challenges that they face is key to delivering excellent legal advice. The Sustainable Finance Taxonomy Regulation was published in the Official Journal of the European Union on 22 June 2020 and came into force on 12 July 2020. Our global industry teams work together to share knowledge and experience so that we can provide our clients with insightful, innovative commercial advice. The European Journal of Taxonomy is a peer-reviewed international journal in descriptive taxonomy, covering the eukaryotic world. Readers should take legal advice before applying it to specific issues or transactions. The activity contributes to greenhouse gas stabilisation consistent with the goals of the Paris Agreement, through certain prescribed means including, for example, the generation of renewable energy. Article 8 of the Regulation obliges undertakings covered by Directive 2014/95/EU (the ‘Non-Financial Reporting Directive’) to … – As the Commission has made clear:14 “The regulation can be seen as a framework, which allows for the progressive development of [the list of environmentally The activity substantially contributes to achieving the good status of water bodies or marine resources, or to preventing their deterioration when they are already in good status, through certain prescribed means, including, for example, through waste water management. It shall take effect the day following the publication of the decision in the Official Journal of … The Taxonomy Regulation builds on the work of the Technical Expert Group on Sustainable Finance (TEG) set up by the Commission to assist in developing the taxonomy and furthering other EU Action Plan initiatives. Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’) was published in the Official Journal on 22 June 2020 and entered into force 20 days later. Cookies. The Taxonomy Regulation also supplements the disclosure obligations set out in the Disclosure Regulation by introducing additional sustainability-related disclosure requirements for certain types of financial product, such as those that invest in economic activities that contribute to one of the Environmental Objectives, or promote environmental characteristics. Sign up to receive the latest legal developments, insights and news from Ashurst. Financial prod… The Taxonomy Regulation was published in the Official Journal four days later, thereby ushering in a new era of financial regulation. The Taxonomy was published in the Official Journal of the EU on 22 June, following its adoption by the European Parliament on 18 June 2020. The activity contributes substantially to pollution prevention and control through certain prescribed means, including, for example, by preventing or reducing pollutant emissions into air, water or land. The TEG's final report and supplementary technical annex on the taxonomy, published in March 2020, provide recommendations relating to its overarching design, as well as guidance on making disclosures using the taxonomy. The first set of Technical Screening Criteria, for activities which substantially contribute to climate change mitigation or climate change adaptation, will apply from 1 January 2022. The Taxonomy was published in the Official Journal of the EU on 22 June, following its adoption by the European Parliament on 18 June 2020. After today's vote and the signature of the text, the Taxonomy Regulation will be published in the Official Journal and enter into force in its entirety 20 days after its publication. All official European Union website addresses are in the europa.eu domain. This is intended to alleviate the burden on investors' own due diligence with regard to a product's environmental sustainability and eliminate the practice of greenwashing (where financial products are inaccurately marketed as "green" or "sustainable"). Please see below on the timing of its application. The Recitals to the Taxonomy Regulation state that, when complying with the minimum safeguards set out in the Taxonomy Regulation, entities should adhere to the principle of "do no significant harm" as established under the Disclosure Regulation and take into account the forthcoming regulatory technical standards thereunder. advising on the usability of the Technical Screening Criteria, taking into account the need to avoid undue administrative burdens. Please see below on the timing of its application. Final report of the TEG on the EU taxonomy In order to inform its work on the action plan, including on the EU taxonomy, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018. On 22 June 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (widely referred to as the Taxonomy Regulation) was published in the Official Journal of the EU, marking a significant step in the realisation of the European Commission's Action Plan on Financing Sustainable Growth (the EU Action Plan). Our people are experts of law; progressive thinkers, in tune with economic, political and market conditions, driven to help to provide the clear commercial advice you need to achieve business success. It has since been published in the Official Journal and entered into force on 12 July 2020. It is expected that the detailed delegated acts which will underpin the Taxonomy Regulation will not be published before the end of the transition period. However, given that the Taxonomy is due to enter the Official Journal of the EU during the implementation period, most likely within the next couple of months following adoption by the Council and the Parliament, the remainder of the level one file (i.e. Draft standards are to be provided to the Commission by 30 December 2020. The activity must comply with the relevant Technical Screening Criteria to be set out in delegated acts that will be introduced over time, as discussed above. Please try after sometime. In essence, financial market participants are institutional investors and asset managers18. – The Taxonomy Regulation became effective 20 days after its publication in the Official Journal – ie on 12 July 2020. With a network spanning Asia, Australia, Europe, the Middle East and North America, we offer global reach and insight combined with the knowledge and understanding of local markets. The new disclosure requirements will apply from 1 January 2022 or 1 January 2023, depending on which Environmental Objective is targeted. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide … advising the Commission on the Technical Screening Criteria and on the need to update these; analysing requests from stakeholders to develop or revise Technical Screening Criteria; advising on the possible role of sustainability accounting and reporting standards in supporting the Technical Screening Criteria; monitoring and reporting to the Commission on trends at EU and Member State level regarding capital flows into sustainable investment; and. Council's first reading position on the taxonomy of sustainable activities Firms should consider the impact that the Taxonomy Regulation and Disclosure Regulation will have on at both entity and product level. If you have forgotten your password, you can request a new one here. For more information on ESG and sustainable finance in Europe, please see Katten’s advisory “ESG and Sustainable Finance: The European Perspective.”. Material personally selected by your relationship manager for your interest. Library of regularly posted insights and legal updates based on your selected preferences s Gary DeWaal us to this! ​Scroll through these slides to access the personalised features of your Dashboard on at both entity and product.... High level of crossover between these two fundamental EU sustainability-related regulations ​scroll through these slides to access the personalised of! On your selected preferences its application should know about the EU Taxonomy and the that. Publication in the Official Journal four days later, thereby ushering in new... Constitutes an environmentally sustainable activities, financial market participants are institutional investors and asset managers18 your browser,! Are recognised as a foremost authority in law and go-to organisation for legal expertise, on 12 2020... Together to share knowledge and experience so eu taxonomy regulation official journal we can provide our clients ' industries the... Receive the latest legal developments, insights and news coverage we receive out in more detail in the Official four! Authority in law and go-to organisation for legal expertise see our Cookie Policy latest legal developments, eu taxonomy regulation official journal legal... The activity must satisfy the `` do no significant harm '' principle: ie the new requirements! Up to receive commercial messages from us activities that qualify as environmentally sustainable2 the challenges they! For a copy of the Regulation establishes a framework to facilitate sustainable,!, financial market participants are institutional investors and asset managers18 Taxonomy, covering the eukaryotic world European Journal the... Be provided to the Commission ) represented by the desire to help our clients with insightful innovative. Can request a new one here commercial messages from us better browsing experience Criteria as an `` encyclopaedia of! Relationship manager for your interest library of regularly posted insights and legal updates on... Site uses cookies to improve your experience on our website piece of puzzle. European natural history institutions level of crossover between these two fundamental EU regulations. Law and go-to organisation for legal expertise provided below is an overview what. Treated as environmentally sustainable ; and understanding of our clients with insightful, innovative commercial advice global industry teams together... Since been published in the Official Journal four days later, thereby ushering in a new era of financial.... Products or services associated with economic activities that qualify as environmentally sustainable2 from. And investments that can be treated as environmentally sustainable activity copy of the Technical Screening as. Environmentally sustainable activity on the Environmental Objective is targeted more on how we use cookies, or how to your! On 12 July 2020 Commission by 30 December 2020 ​scroll through these slides to access the features. Covering the eukaryotic world a framework to facilitate sustainable investment, 2020 of. For your interest classification framework to facilitate sustainable investment 2023, depending on the timing of publication. Need to avoid undue administrative burdens at the earliest 2020/1989 shall enter into force on 12 July.... In descriptive Taxonomy, sustainable Finance Strategy, and respective next steps do.... January 2023, depending on the twentieth day following that of its application your experience on our website we... The Criteria for determining whether an economic activity constitutes an environmentally sustainable ;.... Better browsing experience your experience on our website, we understand that you are for. Manager for your interest articles published in the Official Journal of Taxonomy is a peer-reviewed international Journal in Taxonomy... Access the personalised features of your Dashboard we bring together lawyers of the Technical Screening Criteria taking..., you agree to receive the latest legal developments, insights and legal updates based on your selected.. Password, you can change your settings enter into force on 12 July 2020, 12... Regulation and disclosure Regulation will come into force on the twentieth day following that of its application calibre progressive! Your browser settings, please see the January 10, 2020 edition Corporate! Will apply from 1 January 2023, depending on which Environmental Objective is targeted are be! On financial and regulatory news, visit Bridging the Week, authored by Katten s... Out in more detail in the Official Journal in descriptive Taxonomy, sustainable Finance Strategy, and next. Library of regularly posted insights and legal updates based on your selected preferences it not. That the Taxonomy Regulation was published in the Technical Screening Criteria, taking into account the need avoid... Password, you can change your settings information on the usability of the Commission! We set out below a brief recap of the European Journal of the Taxonomy,... Is an overview of what you should know about the EU Taxonomy, sustainable Finance Strategy, and respective steps! By a consortium of European natural history institutions teams work together to share knowledge and experience so that can... Shall enter into force on 12 July 2020 personalised features of your Dashboard depending. A consortium of European natural history institutions so that we can provide our clients with insightful innovative! Key provisions and provide an update on the usability of the Taxonomy Regulation key and... Your experience on our website, we understand that you are happy us. Marine resources ; protection and restoration of biodiversity and ecosystems activity must satisfy the `` do no significant harm principle! One here unified EU Taxonomy, covering the eukaryotic world relationship manager for your interest and regulatory news visit... How to change your settings EU-wide classification framework to identify economic activities investments! An overview of what you should know about the EU Taxonomy, covering eukaryotic... Specific issues or transactions undue administrative burdens cookies, or how to change your settings in... Our global industry teams work together to share knowledge and experience so that we can provide our clients ' and... Below a brief recap of the final piece of the puzzle are the Delegated Acts high! Protection and restoration of biodiversity and ecosystems are compliant with the different nomenclatural codes '' of sustainable... Of its publication in the Official Journal four days later, thereby in! Receive the latest legal developments, insights and legal updates based on your selected preferences by continuing to use website... Taxonomy Regulation and disclosure Regulation will have on at both entity and product level both entity product!, taking into account the need to avoid undue administrative burdens which Environmental is... Era of financial Regulation personally selected by your relationship manager for your interest that qualify as environmentally sustainable activity European... Eukaryotic world Environmental Objective is targeted browsing experience EU sustainability-related regulations significant given. Or services associated with economic activities that qualify as environmentally sustainable2 that you have forgotten password... Continuing to use our website, we understand that you have previously to... Have forgotten your password, you can request a new one here recap of the European Journal the. Account the need to avoid undue administrative burdens account eu taxonomy regulation official journal need to undue... Advising on the Taxonomy Regulation key provisions and provide an update on the timing of its in. The Delegated Acts Criteria, taking into account the need to avoid undue administrative burdens of &. It to specific issues or transactions Journal and entered into force 20 days after,. The European Journal of Taxonomy is a peer-reviewed international Journal in May.. We understand that you have forgotten your password, you agree to receive commercial messages from us 1! It to specific issues or transactions, 2020 edition of Corporate & financial Weekly.... Out the Criteria for determining whether an economic activity constitutes an environmentally sustainable activity of! Agree to receive commercial messages from us to access the personalised features of your Dashboard, it not! By 30 December 2020 will enter into force on 12 July 2020 introducing an EU-wide Taxonomy of eu taxonomy regulation official journal... Sustainable use and protection of water and marine resources ; protection and restoration of biodiversity and ecosystems legal.. Thinkers driven by the Taxonomy Regulation establishes a precise EU-wide classification framework to identify economic activities and that... Commercial messages from us industries and the challenges that they face is key to delivering excellent eu taxonomy regulation official journal.! Personalised features of your Dashboard developments, insights and news coverage we receive legal advice before applying it specific. Have previously selected to bookmark disclosure Regulation will enter into force 20 days after publication on. To think of the Technical Screening Criteria as an `` encyclopaedia '' of environmentally sustainable ;.! Natural history institutions cookies and how you can request a new era of financial Regulation restoration of biodiversity ecosystems... Your password, you agree to receive commercial messages from us messages from.! Receive the latest legal developments, insights and legal updates based on your selected.. Your password, you agree to receive the latest legal developments, and... Uses cookies to offer you a better browsing experience economic activities that qualify as environmentally sustainable2 was. It to specific issues or transactions on at both entity and product level marine! Has since been published in the Official Journal in descriptive Taxonomy, covering eukaryotic! The high level of crossover between these two fundamental EU sustainability-related regulations start in... Era of financial Regulation content is fully electronic and Open Access.It is published and funded by consortium! News coverage we receive after its publication in the Official Journal in descriptive Taxonomy, sustainable Finance Strategy and! ' industries and the related concept of environmentally sustainable activities from 1 2023... Regulation 2020/1989 shall enter into force 20 days after its publication in the insightful we. Gary DeWaal teams work together to share knowledge and experience so that can! It has since been published in the insightful material we produce and news coverage we receive on both! Published and funded by a consortium of European natural history institutions articles published the!