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The 2 drafts are important steps in Platform’s main deliverables to advise the Commission on potential social and extended environmental taxonomy. Platform’s advice on this will feed in to Commission’s report on potential extension of taxonomy framework to be adopted by the end of 2021 as set under Article 26 (2a and 2b) of the Taxonomy Regulation.

Draft proposal for a social taxonomy

The draft report will argue that in the face of a pandemic, unanswered social questions around a sustainable transition, continuing human rights abuses and continuously rising costs for housing, the time is right to identify economic activities that contribute to advancing social objectives. Just as the EU environmental taxonomy defines activities that substantially contribute to environmental objectives, a social taxonomy would do the same for social objectives.

Built on the foundation of international norms and principles like the sustainable development goals (SDG) and the UN guiding principles for businesses and human rights, a social taxonomy would help investors to contribute to finance solutions around ensuring decent work, enabling inclusive and sustainable communities and affordable healthcare and housing. A social taxonomy would be a tool to help investors identify opportunities to contribute to these objectives.

Public Consultation Report on Taxonomy extension options linked to environmental objectives

This draft proposal will be focussed on support for the environmental transition needed in the whole economy – it proposes further clarity on both: activities that are significantly harmful to environmental sustainability, and those that have no significant impact on it. The aim is to support transitions in areas currently of “significant harm”. They should transition to a level that at least does not cause significant harm, even if they do not actually reach substantial contribution (green).

The report will set out options to build on the existing taxonomy and its use.