EC Consults on Environmental Taxonomy, Issues Other Updates
The European Commission (EC) is seeking comments, until May 03, 2023, on a new set of EU taxonomy criteria for economic activities that contribute substantially to environmental objectives. Additionally, EC launched the European Center for Algorithmic Transparency (ECAT) under the Digital Services Act, adopted a decision to establish a High-Level Group on the Digital Markets Act or DMA, and welcomed the Intergovernmental Panel on Climate Change's (IPCC) synthesis report on climate change.
With respect to the Environmental Taxonomy, EC is seeking views on the new set of EU taxonomy criteria for economic activities that contribute toward sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. EC is also proposing targeted amendments to the Taxonomy Climate Delegated Act, covering the environmental objectives of climate change mitigation and adaptation as well as to the Taxonomy Disclosures Delegated Act. EC is seeking feedback from stakeholders on the activities and technical screening criteria that are presented as part of the Environmental Delegated Act and the amendments to the Climate Delegated Act and Disclosures Delegated Act. EC will consider the feedback received, before finalizing and adopting the delegated acts.
The newly launched European Center for Algorithmic Transparency (ECAT) will provide EC with in-house technical and scientific expertise to ensure that algorithmic systems used by the Very Large Online Platforms and Very Large Online Search Engines comply with the risk management, mitigation, and transparency requirements in the Digital Services Act. This includes, among other tasks, the performance of technical analyses and evaluations of algorithms. The Center will ensure thorough analysis of the transparency reports and risk self-assessment submitted by the designated companies and plans to carry out inspections to their systems whenever EC requires. The Center's researchers will not only focus on identifying and addressing systemic risks stemming from Very Large Online Platforms and Very Large Online Search Engines, but also investigate the long-term societal impact of algorithms.
The decision on High-Level Group on Digital Markets Act indicates that the Group may provide EC with advice and expertise to ensure that the Digital Markets Act and other sectoral regulations applicable to gatekeepers are implemented in a coherent and complementary manner. The Group may also provide expertise in market investigations into emerging services and practices, to help ensure that the Digital Markets Act is future-proof. The High-Level Group will have a mandate of two years and will meet at least once per year. The Digital Markets Act applies to online platforms designated as "gatekeepers," which are large digital platforms acting as important gateways between business users and consumers and will be applicable from May 02, 2023.
The IPCC report on climate change summarizes the state of knowledge of climate change, its widespread impacts and risks, and climate change mitigation and adaptation. The report highlights that finance, technology, and international cooperation are critical enablers for accelerated climate action. If climate goals are to be achieved, both adaptation and mitigation financing would need to increase many-fold. There is sufficient global capital to close the global investment gaps but there are barriers to redirect capital to climate action. Enhancing technology innovation systems as well as international cooperation is key to accelerate the widespread adoption of technologies and practices.
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Keywords: Europe, EU, Banking, Taxonomy, Climate Change Risk, ESG, Sustainable Finance, Digital Markets Act, Digital Services Act, Climate Delegated Act, Disclosures, Delegated Act, EC
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