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$70 trillion

Statement on the Extended Environmental Taxonomy Report

29 March 2022

In response to the report on the Taxonomy extension, Dr Helena Wright, Policy Director at the FAIRR Initiative, said:

 “Investors will welcome the discussion on an extended taxonomy today, which could provide a solution to critiques on the ‘binary’ nature of the current ‘green-only’ taxonomy, which currently covers just 1-5% of the market. Adding intermediate activities will improve transparency for investors who are looking to finance companies in a process of moving towards more green activities, while avoiding those most harmful to the environment.

“The animal agriculture industry will be a critical litmus test. Given significant delays in defining the ‘green’ taxonomy criteria for the agriculture sector, it will be important that an extended taxonomy succeeds in making a distinction between those economic activities of agriculture firms that are genuinely ‘green’, those that are transitioning, and those merely paying lip service to issues like climate change and deforestation.

“If the taxonomy extension gets those definitions right it could rapidly facilitate financial flows towards activities with lower environmental impact and catalyse the building of a more sustainable food system in Europe and beyond.

“More generally, an extension to the taxonomy system as it currently stands can improve consistency between different EU sustainable finance regulations and supporting policy measures, and thus provide much needed clarity to investors.”