The European Union has set concrete criteria for climate-friendly investments. A legal act regulating details of the so-called taxonomy was adopted in the early hours of Thursday morning. EU member states missed a midnight deadline to reject it. It specifies, for example, when hydropower plants can be considered sustainable. There are also criteria for environmentally-friendly bioenergy and forestry. Whether gas and nuclear power and certain agricultural activities can be sustainable, however, is not yet specified. For this, the European Commission plans to present another legal act by the end of the year. The first act will officially come into force on January 1, 2022.
The taxonomy is controversial because it sets the course for large financial flows. It defines which sectors of the economy are climate-friendly. Citizens and investors should thus receive clear information about sustainable financial products - this should help mobilize the billions needed for the climate turnaround.
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