eu taxonomy regulation official journal

What is its scope and impact? 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. All articles published in EJT are compliant with the different nomenclatural codes. 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. We set out below a brief recap of the Taxonomy Regulation key provisions and provide an update on the UK position. It is expected that the detailed delegated acts which will underpin the Taxonomy Regulation will not be published before the end of the transition period. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide taxonomy of environmentally sustainable activities. The Taxonomy Regulation requires the Commission to regularly review the Technical Screening Criteria and amend the relevant delegated acts in line with scientific and technological developments. 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 … 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). 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. ​Scroll through these slides to access the personalised features of your Dashboard. It is useful to think of the Technical Screening Criteria as an "encyclopaedia" of environmentally sustainable activities. Taxonomy Regulation was published in the Official Journal of the European Union. 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 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. Its content is fully electronic and Open Access.It is published and funded by a consortium of European natural history institutions. The final piece of the puzzle are the Delegated Acts. 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. If you have forgotten your password, you can request a new one here. Directive 2013/34/EU. 1. The activity must be carried out in alignment with the OECD's Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. 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. This is a significant development given the breadth of ambition of the European Commission (the Commission) represented by the Taxonomy Regulation. 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. 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. The European Journal of Taxonomy is a peer-reviewed international journal in descriptive taxonomy, covering the eukaryotic world. The activity must satisfy the "do no significant harm" principle: ie. Council's first reading position on the taxonomy of sustainable activities 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. This is evident in the insightful material we produce and news coverage we receive. The Taxonomy Regulation will enter into force on 12 July 2020. the proportion of turnover derived from products or services associated with economic activities that qualify as environmentally sustainable; and. 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. You may unsubscribe at any time. advising on the usability of the Technical Screening Criteria, taking into account the need to avoid undue administrative burdens. The EU-wide green taxonomy set out by the Taxonomy Regulation represents one pillar of the regulatory proposals under the Action Plan and is due … I accept cookies. – The Taxonomy Regulation became effective 20 days after its publication in the Official Journal – ie on 12 July 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. 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 EU Taxonomy It enters into force 20 days after publication, on 12 July 2020. 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. The Taxonomy Regulation also amends the Disclosure Regulation (see our briefing here), inserting an obligation for the European Supervisory Authorities to develop technical standards thereunder specifying the details of the "do no significant harm" principle, as expressed in the Disclosure Regulation. 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. The Taxonomy Regulation also mandates the establishment of a "Platform on Sustainable Finance" (the Platform), which will include representatives of various EU bodies (including the European Environment Agency and the European Supervisory Authorities), environmental experts, and accounting and reporting experts. Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’) was published in the Official Journal on 22 June 2020 and entered into force 20 days later. 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. ... unified EU taxonomy and the related concept of environmentally sustainable investment. This site uses cookies to offer you a better browsing experience. 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. However, it will not start applying in practice until 1 January 2022 at the earliest. The new disclosure obligations will apply from 1 January 2022 or 1 January 2023, depending on the Environmental Objective to which they relate. By continuing to use our website, we understand that you are happy for us to do this. Sustainable finance: “Taxonomy Regulation” published in the Official Journal . The role of the Platform is broad and includes: In order for an activity to qualify as a sustainable economic activity under the Taxonomy Regulation, it must satisfy the following four criteria: The activity must substantially contribute to one or more of the six Environmental Objectives, which are explained further below. This will be set out in more detail in the Technical Screening Criteria. 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. 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. 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. The Taxonomy Regulation sets out the criteria for determining whether an economic activity constitutes an environmentally sustainable activity. It enters into force 20 days after publication, on 12 July 2020. Access all of the content that you have previously selected to bookmark. 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. 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. 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. We are recognised as a foremost authority in law and go-to organisation for legal expertise. In essence, financial market participants are institutional investors and asset managers18. It shall take effect the day following the publication of the decision in the Official Journal of … 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 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. Article 8 of the Regulation obliges undertakings covered by Directive 2014/95/EU (the ‘Non-Financial Reporting Directive’) to … 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. 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. The Taxonomy Regulation will come into force 20 days after its publication in the Official Journal. is carried out in compliance with certain safeguards. The Taxonomy Regulation 1 was published in the Official Journal of the EU on 22 June 2020, following its adoption by the European Parliament on 18 June 2020 and entered into force on 12 July 2020. 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. 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. Context and objectives . 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. For more information on how we use cookies, or how to change your browser settings, please see our Cookie Policy. A virtual library of regularly posted insights and legal updates based on your selected preferences. 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 ). See all EU institutions and bodies. The Proposed Taxonomy Regulation envisages two main mandatory users of the taxonomy17: 1. member states and the EU when setting rules about financial products or corporate bonds that are marketed as environmentally sustainable; and 2. financial market participants offering financial products as environmentally sustainable investments (or as investments having similar characteristics). Draft standards are to be provided to the Commission by 30 December 2020. For more information on the Taxonomy Regulation, please see the January 10, 2020 edition of Corporate & Financial Weekly Digest. For additional coverage on financial and regulatory news, visit Bridging the Week, authored by Katten’s Gary DeWaal. EU Regulation 2019/2088 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 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. All official European Union website addresses are in the europa.eu domain. contributes substantially to one or more of the Environmental Objectives, or directly enables other activities to make a substantial contribution to one or more of them; does not significantly harm any other Environmental Objective; complies with applicable technical screening criteria (. 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. 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. Provided below is an overview of what you should know about the EU Taxonomy, Sustainable Finance Strategy, and respective next steps. sustainable use and protection of water and marine resources; protection and restoration of biodiversity and ecosystems. It shall apply, from January 01, 2021, to the annual financial reports containing financial statements for financial years beginning on or after January 01, 2021. 25 June 2020. 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. 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. The Taxonomy Regulation was published in the Official Journal four days later, thereby ushering in a new era of financial regulation. The announcement of the adoption of the Taxonomy Regulation on 15 April 2020 means that the Council has adopted its position at first reading. Please see below on the timing of its application. 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. Sign up to receive the latest legal developments, insights and news from Ashurst. The final Regulation is expected to be published in the Official Journal in May 2020. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, introducing an EU-wide … Readers should take legal advice before applying it to specific issues or transactions. On Thursday, 3 December 2020, the long-anticipated delegated acts on the environmental, social and governance (ESG) disclosure requirements for benchmark administrators authorised or registered under European Benchmark Regulation (BMR) were published in the EU Official Journal (OJ). 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).. 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