DBRS Morningstar Releases Commentary on the EU Taxonomy

DBRS Morningstar released a commentary titled, “The EU Taxonomy in Place – A Milestone On Financing Sustainable Growth”. This commentary focuses on the adoption of the EU Taxonomy, which marks a major development in sustainable finance and another step in the European Union’s goal to achieve its climate targets. A key part of the European Commission’s Renewed Sustainable Finance Strategy and Action Plan on Financing Sustainable Growth is the EU Taxonomy. By clearly defining what environmentally sustainable economic activities are, the EU Taxonomy aims to be a key tool for sustainable investment decisions. We view the adoption of the EU Taxonomy as a positive development in sustainable finance and in incentivising sustainable investment.

Key highlights from the commentary include:
-- A discussion on the support the EU Taxonomy has among investors and on the implementation challenges, including an in/out approach to finance, availability of corporate disclosures, and harmonisation of international taxonomies.
-- Where the EU Taxonomy fits in its Action Plan on Financing Sustainable Growth.
-- How the EU Taxonomy works, by establishing performance thresholds or ‘technical screening criteria’ for economic activities in line with the six environmental objectives of the Taxonomy Regulation.
-- When the EU Taxonomy will be implemented and who has to comply with disclosure obligations.

Notes:
The full commentary is available at www.dbrsmorningstar.com.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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