The EU Taxonomy Regulation is one of the cornerstones of Europe’s sustainable finance framework. Its main goal is to create a clear and common language for what counts as an environmentally sustainable economic activity. By doing so, it helps investors, companies, and policymakers steer capital towards activities that truly contribute to the green transition.
For companies, the regulation is more than just a reporting obligation. It offers an opportunity to demonstrate their environmental commitment, increase transparency, and build trust with investors and stakeholders. The Taxonomy sets technical screening criteria for six environmental objectives:
- Climate change mitigation
- Climate change adaptation
- Sustainable use of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection of biodiversity and ecosystems
Businesses subject to the Corporate Sustainability Reporting Directive (CSRD) must disclose how and to what extent their activities align with the EU Taxonomy. This creates a direct link between sustainability reporting and access to finance.
Why it matters: The EU Taxonomy is not just a compliance exercise – it is a strategic tool. Companies that align early can gain competitive advantage, attract green financing, and strengthen their reputation in global markets.
Learn more on Taxonomy in our course on Taxonomy Regulation.