Developing Criteria on Agricultural Activities to be Included in the EU Sustainable Finance Taxonomy
Ecologic Institute leads the project for DG FISMA on the 'Assistance in developing criteria on agricultural activities to be included in the EU Sustainable Finance Taxonomy'. Ecologic Institute leads a consortium with the Institute for European Environmental Policy, AISBL (IEEP), SAC Commercial Ltd. (SACC) and Universidad Politécnica de Madrid (UPM). Ecologic Institute and partners are supporting the TEG sub-group on taxonomy in developing the agriculture subset of the Taxonomy in relation to climate mitigation objectives and extend its understanding in the area of agriculture.
Climate change presents one of the most central challenges for agriculture and rural areas in the European Union (EU). Efforts to reduce agriculture GHG emissions will need to increase if agricultural sector is to play a significant role in the EU’s emission reduction targets to 2030 as set out in the Paris Agreement. In this context, investments from private sector are necessary to scale up the uptake of the measures to meet the reduction targets.
This study builds on the Commission proposal for a Regulation on the establishment of a framework to facilitate sustainable investment (COM (2018) 353 final). Article 5 of the Regulation sets out six environmental objectives to which investments made within the EU should be consistent and promoted. These are:
- climate change mitigation;
- climate change adaptation;
- sustainable use and protection of water and marine resources;
- transition to a circular economy, waste prevention and recycling;
- pollution prevention and control; and
- protection of healthy ecosystems.
These objectives are further elaborated in Articles 6 – 11 of the proposal. A process is set out to develop a technically robust classification system – a sustainability taxonomy - including criteria for determining whether economic activities are environmentally sustainable. The Technical Expert Group on Sustainable Finance (hereafter TEG) was established in 2018 to determine technical screening criteria in this sustainability taxonomy.