EC Rule Sets Out Screening Criteria for Sustainable Economic Activity
The European Commission (EC) published the Delegated Regulation 2021/2139, which establishes the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation; the regulation also establishes the criteria for determining whether that economic activity causes no significant harm to any of the other environmental objectives. Regulation 2021/2139 supplements the Taxonomy Regulation (2020/852) on the establishment of a framework to facilitate sustainable investment. Regulation 2021/2139 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from January 01, 2022.
The Taxonomy Regulation establishes the general framework for determining whether an economic activity qualifies as environmentally sustainable for the purposes of establishing the degree to which an investment is environmentally sustainable. The Taxonomy Regulation applies to measures adopted by the European Union or by member states that set out requirements for financial market participants or issuers in respect of financial products or corporate bonds that are made available as environmentally sustainable, to financial market participants that make available financial products, and to undertakings that are subject to the obligation to publish a non-financial statement or a consolidated non-financial statement. The Taxonomy Regulation requires EC to adopt delegated acts establishing the technical screening criteria for determining the conditions under which a specific economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation, respectively, and to establish, for each relevant environmental objective laid down in Article 9 of the Taxonomy Regulation, technical screening criteria for determining whether that economic activity causes no significant harm to one or more of those environmental objectives. Regulation 2021/2139 sets out the technical screening criteria in its Annexes:
- Annex I sets out the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives laid down in Article 9 of the Taxonomy Regulation.
- Annex II sets out the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives laid down in Article 9 of the Taxonomy Regulation.
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Effective Date: December 29, 2021
Keywords: Europe, EU, Banking, Insurance, Securities, Taxonomy Regulation, Technical Screening Criteria, ESG, Climate Change Risk, Sustainable Finance, EC
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