What does the EU Taxonomy mean?
The taxonomy is the EU's classification tool for determining which economic activities can be counted as sustainable and contribute to the green transition in Europe. By Nordic Swan Ecolabelled products and services, companies can be at the forefront and contribute to achieving the six environmental and climate goals that the taxonomy works towards.
In order for an economic activity to be considered environmentally sustainable, it must meet the following four conditions:
- Contribute substantially to the achievement of at least one of six defined environmental objectives (see below).
- Not cause significant harm to any of the other environmental objectives.
- Meet minimum requirements for social and governance conditions.
- Comply with the technical screening criteria set by the European Commission.
What are the six climate and environmental goals?
The taxonomy defines six long-term climate and environmental goals:
- Climate change mitigation.
- Adaptation to climate change.
- Sustainable use and protection of water and marine resources.
- Transition to a circular economy, waste reduction and increased reuse and recycling of materials.
- Pollution prevention and control;
- Protect and restore biodiversity and ecosystems.
An activity must contribute substantially to at least one of the six environmental objectives and not have a significant negative impact on the others. In addition, the activity must meet minimum requirements for social and governance conditions.
The Nordic Swan Ecolabel's requirements look at the environmental impact of entire products and services and set requirements where relevant to reduce the burden on the environment, nature and human health. Important areas to set requirements for are reduced climate impact, reduced water consumption, reduced use of hazardous chemicals, raw material extraction, reuse, repairability, recycling and protection of biodiversity. In other words, in principle, against all six goals within the taxonomy.
To know how Nordic Swan Ecolabelled products and services live up to the taxonomy's goals, you can look at the requirements your Nordic Swan Ecolabelled product or service meets. In addition, there is a lot of good information in the background documents for each product group.
The EU Taxonomy covers the following sectors:
- Construction: Construction, renovation, demolition of buildings, road maintenance, use of cement.
- Production: Plastic packaging, electrical and electronic equipment, pharmaceutical products.
- Energy: Renewable energy sources, energy transmission, specific activities related to nuclear energy and gas.
- Information technology: IT software and consulting, data-driven solutions.
- Forestry: The establishment, conservation, operation and restoration of forests.
- Services: Sale of spare parts and used products, promotion of reuse of products and materials, marketplaces for trading in products for reuse.
- Transport: New modes of transport by sea, air, road and track.
- Water supply and treatment: Access to water, urban wastewater, sustainable sewage systems, removal of phosphorus from wastewater.
- Emergency preparedness: nature-based solutions, emergency flood relief efforts, etc.
Who is covered by the EU Taxonomy?
Banks, insurance companies and listed companies with more than 500 employees or a balance sheet turnover of at least €20 million must report according to the rules of the taxonomy. Other companies can report if they want to.
The EU taxonomy for sustainable activities is formally a regulation – a piece of legislation. It defines which economic activities we should consider sustainable and will contribute to increased private investment in economic activities that promote the green transition in Europe.