What is the European Taxonomy?

The EU ESG Taxonomy was made by the European Parliament and is made to accompany the European Green Deal. These initiatives support the implementation of reaching carbon-zero targets and benefit the environment.

The EU ESG Taxonomy provides a general, clear definition of what it means for a business to be sustainable, and the actions that they have to take to reduce the carbon footprint and reach this.

Now the question is how is the EU ESG Taxonomy useful for such people in the public at large? Well, with its voluntary framework support the framework supports the new climate change taxes and their associated incentives for employing people to reduce carbon emissions.

How Did We Get Here?

One hundred years ago ‘Green’ or ‘sustainable’ business wasn’t a thing. ‘Global warming’ wasn’t a thing, there was only the pursuit of profit and productivity. Today we know that the way things appeared to be at the start of the 20th century was not a true representation of what was really going on - global warming and other forms of environmental damage were (albeit in most cases unknowingly) running rampant, fuelled by industrial and business practices that we thought were in our best interest, without realising the damage that was being done to the planet that we call home.

As the extent of that damage became more apparent however, we started to realise what was really going on, and started to adopt a new way of doing things, a way of doing things that was kinder to the environment. Eventually, that led to the situation we find ourselves in today.

The Green Situation in Europe

So what is the situation in Europe at the moment, as regards environmentally friendly business? Well, you have to understand that in Europe we’re concerned about how much greenhouse gases aggravate global warming. The EU ESG Taxonomy specifies sectors and types of activity as a means of establishing responsible behaviour by doing their bit to protect the environment.

So, when it comes to the fields and sectors identified by the EU ESG Taxonomy - which have the greatest need to reduce greenhouse gas emissions? That isn’t clearly known yet, but obviously by building this knowledge you can also understand who in the EU has the most to gain from the new EU ESG Taxonomy initiatives.

This classification has served to remind me why the EU so desperately needs a database to clarify who has stake in the deal, who has potential of being a compliant employer in Europe, who has already implemented the plans needed and now with the future of the tax system outlined in the regulations is what's needed. Until and unless that is done there will be a black circle with nobody clearly in it.

On a more pragmatic note though, here are some suggestions that in my opinion might lead to a highly effective implementation of the EU ESG Taxonomy - which is something that all of us in Europe (the whole continent, not just the EU and the various other institutions) should want. After all, the effects of pollution, global warming and other environmental damage know no such borders.

1. When putting in place a EU cap and trade scheme for greenhouse gases and similar measures consider using the EU ESG taxonomy to help the EU scale up the tax incentive. In a single currency a market place works better. UK companies and others with EU operations could benefit from the flexible and more efficient EU taxonomy indexer. Emails are reaching 300 a day with an email taking less than a second to send. Admittedly some incentive schemes in the EU have hampered progress within the EU.

2. Undertaking debates and carrying out surveys to understand how the real gain is for the sector in which they operate.

3. Understanding that the EU ESG taxonomy can only help if the EU knowledge base is there. (A Google search will make it quite clear how important this is).

4. Reducing red tape & remembering that the EU is in charge when it comes to the EU ESG Taxonomy. Perhaps a firmer hand might help get things done here?