Platform on Sustainable Finance publishes Draft Report

What’s new?

On 8 January 2025, the Platform on Sustainable Finance (the Platform) published a draft report (the Draft Report) by its Technical Working Group on preliminary recommendations for the review of the Climate Delegated Act and the addition of activities to the EU Taxonomy. The Draft Report is open for public consultation until 5 February 2025.

What does the Draft Report cover?

Two of the Platform’s three objectives are relevant to the Report. These are:

• to enhance the usability of the Taxonomy by making recommendations to reduce its complexity while improving its effectiveness and
• to continue expanding the scope of activities covered by the Taxonomy.

As part of its mandate, the Platform carried out a study to better understand how the Taxonomy and the broader framework are being implemented. Two key messages from the industry stood out:

• the need to simplify the application of Do No Significant Harm (DNSH) criteria and
• a strong push to expand the scope of the Taxonomy.

The first reporting cycle brought to light several persistent issues, including the DNSH technical criteria. While these are crucial for avoiding unintended environmental consequences, preserving the interconnectedness of environmental objectives and closing loopholes, it was felt that they can be difficult to assess retrospectively.

To tackle these challenges, the Platform is working on a more nuanced approach, including understanding the circumstances under which specific criteria are most challenging to evaluate. For companies, retrospective assessments can be particularly demanding when calculating revenue alignment, as some DNSH criteria would have required upfront consideration at the beginning of an activity.

Key areas of feedback being sought:

The Draft Report looks for feedback in two main areas.

A. Proposed revisions to the Climate Delegated Act revision:
These include

• revised energy-related thresholds
• proposed revisions of bioenergy, manufacturing, environmental protection, construction and real-estate activities/criteria
• review of the generic DNSH criteria for water, pollution and biodiversity and
• recommendations for four further areas of Delegated Act revision work.

B. Proposed new Taxonomy activities and their criteria:
These include

• mining of lithium, nickel and copper
• smelting and refining of lithium, nickel and copper
• digital solutions and services and
• criteria for 28 “adapted” activities for inclusion in Adaptation Annex.

Additional proposals made in the Draft Report include:

• headline ambition statement for adaptation
• identification of highly vulnerable sectors for later inclusion and
• note on nature-based solutions work.

Next Steps

As part of its review of DNSH criteria from a usability perspective, the Platform is seeking, through its public consultation, evidence-based input that are difficult to assess accompanied by concrete examples.

In terms of expanding the Taxonomy, the report reflects what the Platform has been able to achieve within the limits of the current mandate. That said, while its priority has been to improve the usability and effectiveness of the Taxonomy and the broader sustainable finance framework, once the necessary changes have been implemented, the Platform hopes that a future mandate will allow it to focus on incorporating many more activities into the Taxonomy.

Stakeholders are invited to respond to the Call for Feedback, which runs to 5 February 2025. Details on how to respond to it can be found here.