EU: EU Taxonomy – Review of Climate and Environmental Delegated Acts 

 

The EU Commission is conducting a public consultation about the review of the EU taxonomy environmental delegated act to update and simplify the technical screening criteria. 

The EU Taxonomy is a classification system that sets out criteria for identifying environmentally sustainable economic activities, helping to channel investment towards the EU’s green transition. While the Taxonomy Regulation provides the overarching framework, the European Commission defines the detailed technical screening criteria—used to assess whether an activity is environmentally sustainable—through delegated acts. The Climate and Environmental Delegated Acts, adopted in 2021 and 2023 respectively, establish criteria for activities contributing to six key objectives: climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the circular economy, pollution prevention and control, and biodiversity protection. 

This initiative aligns with the Commission’s broader political priorities, particularly its commitment to reducing reporting burdens for businesses and enhancing sustainable finance through clearer and more proportionate rules. It also fulfils a legal requirement under the Taxonomy Regulation to periodically review and, where necessary, update the technical screening criteria. As such, the proposed amendments respond both to this legal obligation and to stakeholder concerns about the complexity of the current framework. The work is closely connected to the Commission Communication “A Competitiveness Compass for the EU” and the recent Omnibus I Sustainability simplification package. 

The main issue addressed by this initiative is the difficulty of applying certain technical screening criteria in practice. Although the EU Taxonomy is a cornerstone of the EU’s sustainable finance framework, stakeholders have identified inconsistencies, legal uncertainty, and excessive complexity in some criteria, based on early implementation and reporting experience. These challenges affect a broad range of actors—including companies, financial institutions, auditors, and public authorities—who must interpret and apply the rules. 

In particular, stakeholders highlight the complexity of the framework, misalignment with updated EU legislation, and technical criteria that are unclear or overly detailed. Concerns are especially pronounced regarding the “do no significant harm” requirements and the lack of clear guidance on how to demonstrate compliance. These shortcomings increase administrative burdens, raise compliance risks and costs, and may discourage sustainable investment. 

Without action at EU level, these issues are likely to continue or intensify. Beyond administrative challenges, there is also a political risk: if the framework is seen as impractical or insufficiently precise, confidence in the EU’s broader sustainable finance agenda could be undermined. 

To address these concerns, the Commission has already gathered and will continue to collect evidence through targeted consultations, feedback from the Call for Evidence, and ongoing engagement with stakeholders involved in implementing the Taxonomy. Contributions from the scientific community and well-supported proposals for amendments will play a key role in assessing the accuracy, proportionality, and relevance of any changes.