The European Green Deal, approved on 11 December 2019, establishes a green transition strategy, with the aim of achieving climate neutrality between now and 2050 and enabling the sustainable growth of the EU economy on climate and environmental aspects, in all action areas and making the transition fair and inclusive for all.
To achieve this, it was necessary to have a system and some common rules that precisely define what it means “to be sustainable”, which is why a system for the unified classification of sustainable economic activities has been produced, which forms the basis for the European Taxonomy.
One of the elements of these uniform criteria must be avoiding any significant harm to any of the environmental targets established in the European Taxonomy Regulation.
In February 2022, the Sustainable Finance Platform, which advises the European Commission, presented the second version of the report on the Social taxonomy, establishing the foundations for future European regulations in this area. This considers the groups involved (workers, end users, consumers and the communities affected) and three general targets associated with the development of the activity.
The Taxonomy Regulation forms part of the European Commission’s regulatory implementation that aims to bind the financial sector to the achievement of the targets for the decarbonisation of the European economy and the meeting of the United Nations Sustainable Development Goals. This has led to the establishing of the ESG (environmental, social and governance) principles, these being the factors that make a company sustainable through its commitment in these three areas, without ever forgetting the financial aspects.
Goals
The application of the European Taxonomy is essential for achieving the climate and environmental targets established in the Paris Agreement.
Environmental factors
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources.
- The transition to a circular economy.
- Pollution prevention and control.
- The protection and restoration of biodiversity and ecosystems.
Social factors.
- Decent work.
- Adequate living standards and well-being of end consumers.
- Inclusive and sustainable communities and societies.
Governance factors
- Disclosure.
- Transparency.
- Fight against corruption.
Advantages
Each environmental, social or governance goal generates advantages that help to create a more habitable and sustainable world.
Environmental goals
Description
An economic system in which the value of the products, materials and other resources in the economy last for as long as possible, enhancing their efficient use in production and consumption, in that way reducing the environmental impact of their use and reducing to a minimum the waste and the release of hazardous substances in all phases of the life cycle, where appropriate by applying the waste hierarchy.
Advantages
- Local regeneration.
- Reducing the amount of waste.
- Using or sharing rather than consuming.
- Recycling and up-cycling instead of disposing.
- Saving and improving.
- Inventory of materials.
- Understanding the life cycle. Service life.
- Creation of value and identifying risk factors.
Description
Uses that could be considered environmentally sustainable, in accordance with the regulations, that protect and preserve surface and ground water resources, as well as marine resources.
Advantages
- Avoiding floods.
- Increased value of properties.
- Measures for water management in building works.
- Saving and improving.
Description
Anticipation and mitigation of pollution, this being understood as a substance, vibration, heat, noise, light or other pollutant present in the atmosphere, water or soil that could have harmful effects for human health or the environment, that could cause damage to property or that could impair or hinder the enjoyment or other legitimate uses of the environment.
Advantages
- Improves health. Reduction of sick leave and absenteeism.
- Avoiding hazardous substances in materials.
- Detecting pollution of soils.
- Reduction of noise pollution during the building work and its use.
- Higher property prices.
- Elimination of waste.
- Saving and improving.
Description
Protection of biodiversity, this being understood as the variability among living organisms from all sources, including, inter alia, terrestrial, marine, and other aquatic ecosystems, and the ecological complexes of which they are part: this includes diversity within species, between species and of ecosystems.
Advantages
- Having environmental reports to be able to implement mitigation measures.
- Identifying and protecting the elements of the ecosystem that can provide added value to the investment.
Description
Process of keeping the increase in the average world temperature to well below 2ºC and to continue working to limit it to 1.5ºC compared to pre-industrial levels, in keeping with the Paris Agreement.
Advantages
- Awareness of energy consumption in the usage phase.
- Analysis of the quality of the cladding.
- Energy saving.
- Improves the ambient quality of the interior (air, temperature, lighting, acoustics).
- Increase in value.
Description
Process of adjusting to current and forecast climate change and its repercussions.
Advantages
- Analysis and awareness of the climate risks.
- Being able to take adaptation measures.
- Analysis of the quality of the cladding.
- Energy saving.
- Improves the ambient quality of the interior (air, temperature, lighting, acoustics).
- Increase in value.
Governance targets
Description
Disclosure of the environmental targets to which the investment contributes and description of the way and the extent to which the underlying investments are used for economic activities that are considered environmentally sustainable and do not cause significant harm.
Advantages
- Understanding the company’s practices in relation to the targets.
- Communicating and disclosing the targets to the workforce and clients.
- Compliance systems.
Description
Transparency in the turnover that comes from products or services related to economic activities considered environmentally sustainable, as well as of fixed assets and operating expenses related to these activities.
Advantages
- Understanding of the company.
- Transparency in remuneration.
- Transparency in corporate governance.
- Confidence in the company.
Description
Prevention of corruption and crimes through disclosure, transparency and their prevention.
Advantages
- Crime prevention policy.
- Number of reports for corruption and bribery.
- Whistleblowing channel.
- Responsible supply chain.
- Cybersecurity
Description
An economic system in which the value of the products, materials and other resources in the economy last for as long as possible, enhancing their efficient use in production and consumption, in that way reducing the environmental impact of their use and reducing to a minimum the waste and the release of hazardous substances in all phases of the life cycle, where appropriate by applying the waste hierarchy.
Advantages
- Local regeneration.
- Reducing the amount of waste.
- Using or sharing rather than consuming.
- Recycling and up-cycling instead of disposing.
- Saving and improving.
- Inventory of materials.
- Understanding the life cycle. Service life.
- Creation of value and identifying risk factors.
Description
Uses that could be considered environmentally sustainable, in accordance with the regulations, that protect and preserve surface and ground water resources, as well as marine resources.
Advantages
- Avoiding floods.
- Increased value of properties.
- Measures for water management in building works.
- Saving and improving.
Description
Anticipation and mitigation of pollution, this being understood as a substance, vibration, heat, noise, light or other pollutant present in the atmosphere, water or soil that could have harmful effects for human health or the environment, that could cause damage to property or that could impair or hinder the enjoyment or other legitimate uses of the environment.
Advantages
- Improves health. Reduction of sick leave and absenteeism.
- Avoiding hazardous substances in materials.
- Detecting pollution of soils.
- Reduction of noise pollution during the building work and its use.
- Higher property prices.
- Elimination of waste.
- Saving and improving.
Description
Protection of biodiversity, this being understood as the variability among living organisms from all sources, including, inter alia, terrestrial, marine, and other aquatic ecosystems, and the ecological complexes of which they are part: this includes diversity within species, between species and of ecosystems.
Advantages
- Having environmental reports to be able to implement mitigation measures.
- Identifying and protecting the elements of the ecosystem that can provide added value to the investment.
Description
Process of keeping the increase in the average world temperature to well below 2ºC and to continue working to limit it to 1.5ºC compared to pre-industrial levels, in keeping with the Paris Agreement.
Advantages
- Awareness of energy consumption in the usage phase.
- Analysis of the quality of the cladding.
- Energy saving.
- Improves the ambient quality of the interior (air, temperature, lighting, acoustics).
- Increase in value.
Description
Process of adjusting to current and forecast climate change and its repercussions.
Advantages
- Analysis and awareness of the climate risks.
- Being able to take adaptation measures.
- Analysis of the quality of the cladding.
- Energy saving.
- Improves the ambient quality of the interior (air, temperature, lighting, acoustics).
- Increase in value.
Description
Disclosure of the environmental targets to which the investment contributes and description of the way and the extent to which the underlying investments are used for economic activities that are considered environmentally sustainable and do not cause significant harm.
Advantages
- Understanding the company’s practices in relation to the targets.
- Communicating and disclosing the targets to the workforce and clients.
- Compliance systems.
Description
Transparency in the turnover that comes from products or services related to economic activities considered environmentally sustainable, as well as of fixed assets and operating expenses related to these activities.
Advantages
- Understanding of the company.
- Transparency in remuneration.
- Transparency in corporate governance.
- Confidence in the company.
Description
Prevention of corruption and crimes through disclosure, transparency and their prevention.
Advantages
- Crime prevention policy.
- Number of reports for corruption and bribery.
- Whistleblowing channel.
- Responsible supply chain.
- Cybersecurity
Description
Social and work-related aspects that improve the quality of life of the employees.
Advantages
- Increase in productivity.
- Improvement and prestige.
- Work-life balance measures.
- Employee training.
- Reduction of the pay gap.
- Stable employment.
- Payment of suppliers.
- Prestige.
Description
Create an inclusive society, without ghettos, facilitating a social balance and improved happiness rates.
Advantages
- Diversity in ages.
- Social mobility.
- Create a melting pot between different individuals from different socio-cultural classes and backgrounds.
- Gender diversity.
- Employment of disabled people.
- Removal of physical barriers.
- Health and safety policy
- Upgrading of the company and brand.
- Prestige.
Description
Satisfaction among end customers with compliance and achievement of the targets.
Advantages
- Level of customer satisfaction.
- Prestige.
Associated regulations
If you would like to find out more about the aspects of the European Taxonomy, we can offer you information about the legislation that governs it.
European Taxonomy Regulation
European Commission Delegated Regulation
Spanish Law 7/2021 on climate change and energy transition
Glossary
So that you are clearer about the terminology most commonly used in relation to sustainability, please take a look at the glossary we have prepared to help you.
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