EU Taxonomy — Regulation on Sustainable Investment Framework

The EU Taxonomy Regulation (Regulation (EU) 2020/852) establishes a unified classification system defining which economic activities qualify as environmentally sustainable. It forms the centrepiece of the EU's sustainable finance strategy and aims to prevent greenwashing by setting clear, science-based criteria for sustainability.

The regulation defines six environmental objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity. An economic activity qualifies as taxonomy-aligned if it substantially contributes to at least one of these objectives, does not significantly harm any of the others (Do No Significant Harm), and complies with minimum social safeguards.

The EU Taxonomy is of central importance for financial market participants, large companies, and the public sector, as it provides the foundation for disclosure obligations, investment decisions, and the assessment of environmental sustainability.

The EU Taxonomy originated from the European Commission's Action Plan on Financing Sustainable Growth of March 2018. On 24 May 2018, the Commission presented the legislative proposal. After extensive negotiations, the Council and Parliament reached a political agreement in December 2019. The Council adopted the regulation at first reading on 15 April 2020. The regulation was published in the Official Journal of the EU on 22 June 2020 and entered into force on 12 July 2020.

The specific technical screening criteria were supplemented step by step through delegated acts: the Climate Delegated Act (EU) 2021/2139 for the climate objectives has applied since 1 January 2022. The Complementary Climate Delegated Act on nuclear energy and gas was published on 15 July 2022 and has applied since January 2023. The Environmental Delegated Act (EU) 2023/2486 for the four remaining environmental objectives has applied since 1 January 2024.

On 26 February 2025, the Commission presented the Omnibus I simplification package. It limits mandatory Taxonomy reporting to companies with more than 1,000 employees and more than EUR 450 million in net turnover, introduces voluntary opt-in reporting for companies below these thresholds, establishes a 10% materiality threshold, and substantially simplifies the reporting templates. The corresponding simplification Delegated Act was adopted on 4 July 2025.

The EU Taxonomy addresses various actors in financial markets and the real economy:

• Financial market participants: Providers of financial products in the EU, including asset managers, pension funds, insurers, and banks that market financial products as environmentally sustainable.
• Large companies: Companies subject to reporting under the CSRD must disclose the share of their turnover, capital expenditure, and operating expenditure relating to taxonomy-aligned activities.
• EU and Member States: The Taxonomy serves as a reference framework for public measures, standards, and labels for green financial products.
• Third-country companies: Indirectly affected if they offer financial products in the EU or fall under CSRD reporting obligations.

• Substantial contribution: Economic activities must substantially contribute to at least one of the six environmental objectives, measured against specific technical screening criteria.
• Do No Significant Harm (DNSH): The activity must not significantly harm any of the other five environmental objectives.
• Minimum social safeguards: Compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.
• Disclosure obligations for financial products: Financial market participants must disclose the proportion of taxonomy-aligned investments in their products.
• Disclosure obligations for companies: Reporting companies must report KPIs on turnover, CapEx, and OpEx related to taxonomy-aligned activities.
• Technical screening criteria: Detailed, sector-specific criteria define the thresholds for taxonomy alignment of each economic activity.

history only vaguely states 'In July 2025, the Commission adopted a further delegated act for simplification.' The Omnibus I package of 26 February 2025 — limiting mandatory Taxonomy reporting to the largest companies (>1,000 employees, >EUR 450M turnover), voluntary opt-in reporting, 10% materiality threshold, drastically simplified templates — is not substantively described.

The last_amended field is set to 2024-06-28. The most recent relevant change is the simplification Delegated Act adopted 4 July 2025 (amending 2021/2178, 2021/2139, 2023/2486), published 8 January 2026, in force since 28 January 2026.