11. The Taxonomy Regulation: More Important Than Just as an Element of the Capital Markets Union

On the basis of the European Commission’s 2015 Action Plan “on Building a Capital Markets Union” (CMU), as further specified in the 2017 “Mid-Term Review of the [CMU] Action Plan”, the European Parliament and the Council adopted on 27 November 2019 Regulation (EU) 2019/2088 “on sustainability-related disclosures on the financial services sector” (SFDR) and Regulation (EU) 2019/2089 “as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks”. The third—and probably most important—part of the related “trilogy”, which is also based on the Commission’s 2018 “Action Plan on Financing Sustainable Growth”, is Regulation (EU) 2020/852 “on the establishment of a framework to facilitate sustainable investment” (the so-called Taxonomy regulation, TR). The objective of this legislative act (which, inter alia, also introduces specific amendments to the SFDR) is to establish uniform criteria for determining whether an economic activity qualifies as environmentally sustainable for the purpose of establishing the degree to which an investment is environmentally sustainable as well. It does not itself establish a label for sustainable financial products; the details of what constitutes an environmentally sustainable activity or product is being built-up through delegated acts to be adopted by the Commission, of which the first two will apply from 1 January 2022 and the other four from 1 January 2023. The main purpose of this Chapter is to briefly albeit systematically present the “system of rules” relating to the “core element” of the TR, namely the criteria according to which an economic activity will be considered environmentally sustainable and the six environmental objectives (the six types of economic activities which qualify as environmentally sustainable activities for the purposes of the taxonomy), and to analyse the TR’s field of application, as well as the disclosure requirements for environmentally sustainable investments, as set out in the TR. It concludes with the same considerations on how the core element of the TR will be of primary importance even for entities which are not covered by its scope of application, namely beyond the reach of the CMU project.