Platform on Sustainable Finance response to the public consultation on the draft delegated act amending the EU taxonomy delegated acts

The European Green Deal sets the blueprint for the deep economic transformation required to address climate emergency and global environmental degradation. Against this backdrop, the European Union has made several ambitious commitments, including reducing its greenhouse gas emissions by at least 55% reduction by 2030 compared to 1990 levels, with a 90% emission cut by 2040 under consideration.

Achieving the Green Deal’s objectives requires substantial investment in new technologies and business models, with an estimated additional €620 billion needed annually until 2030 — a two‑thirds increase compared to average levels over the 2011‑2020 period — with the bulk of funding expected to come from private entities.

The EU taxonomy, the cornerstone of the sustainable finance framework, was designed to channel capital towards sustainable investments and narrow the investment gap. After two years of implementation by large publicly listed companies, it has already guided €530 billion investments towards climate mitigation and adaptation, particularly in sectors like energy, automotive, and real estate.

As highlighted in the financing a clean and competitive transition report, the taxonomy is a powerful tool for aligning investments with the EU Green Deal’s goals, translating environmental performance into financial metrics. Monitoring capital flows towards sustainable investments, maintain private sector engagement, support orderly transitions, and enhance the EU’s competitiveness.

However, unlocking the taxonomy’s full potential requires ongoing refinements and simplifications. The taxonomy’s novelty explains both its successes and complexities. The EU taxonomy is a new method of reporting to explain financial key performance indicators (KPIs) in sustainability terms. Having observed some initial usability problems, the Platform is well placed to provide guidance on the best ways to simplify reporting but not at the expense of the Green Deal objectives.

The Platform recently issued a set of recommendations aimed at simplifying the EU taxonomy to foster sustainable investments. These proposals targeted a one‑third reduction in corporate reporting burdens, a simplified green asset ratio, a more practical approach to the do no significant harm is criteria, and measures to help SMEs access sustainable finance. The Platform welcomes and acknowledges that several of its proposals have been taken into consideration in the draft delegated regulation amending the taxonomy delegated acts. Overall, the proposed amendments represent a step in the right direction.

However, the Platform recommends aligning the scope of taxonomy reporting with the scope of the Corporate Sustainability Reporting Directive (CSRD), while preserving the CSRD’s original scope. For non‑SME companies below the 1000‑employee threshold, reporting should be focused on the most essential standards, including taxonomy alignment. Limiting the requirements to the minimum essential reporting elements will ensure the integrity of the European financial market is upheld (as it is predominantly an ESG market) while reducing unnecessary burden on entities.

The response outlines the Platform's views exclusively on the draft delegated regulation amending the taxonomy delegated acts, with the exception of the aforementioned reduction in the scope of CSRD and taxonomy reporting proposed in the omnibus, given the direct combined impact on the EU taxonomy overall.