Understanding the EU Green Taxonomy in 7 questions

Bastien Halary
DateOctober 7, 2021

The EU Council has been working for many months on developing the Green Taxonomy. What’s it all about? Deepki’s blog breaks it down for you here.. 

1. What is the European Union’s Green Taxonomy? 

The EU taxonomy is a classification system that establishes a list of environmentally sustainable economic activities, tying ecological principles to business interests. 

The Green Taxonomy promotes sustainable finance by providing investors with criteria to identify and assess environment-friendly activities. By proposing a common European framework, it also aims to serve as a safeguard against greenwashing.

2. What is its objective?

The EU Taxonomy aims to reduce carbon emissions by 50% by 2030 and achieve carbon neutrality by 2050, providing impetus for European countries to lead the fight against climate change. In France for example, the tertiary decree requires the real estate sector to reduce its energy consumption (vs. 2010) by 40% in 2030, 50% in 2040 and 60% in 2050.

3. What sectors are concerned?

  • Communication and Information technologies
  • Water, waste and sewage
  • Construction
  • Transportation
  • Industrial production
  • Agriculture and forest maintenance 
  • Suppliers of gas, electricity, steam and air conditioning

4. How are green activities characterized?

Activities are organized into three categories: 

  • Neutral or low-carbon activities
  • Activities in transition, i.e., those enabling a zero-carbon emission scenario by 2050 
  • Activities enabling the transition, i.e., helping other companies reduce their greenhouse gas emissions.

Also read: What is a carbon footprint?

What criteria determine sustainability?

To be considered sustainable, an activity must contribute to one of six defined objectives, without undermining any of the other five:

  • Climate change mitigation
  • Climate change adaptation
  • Protection of water and marine resources
  • Circular economy and waste management
  • Pollution prevention and control
  • Respect for ecosystems

5. When does the EU Taxonomy go into effect?

The European Taxonomy will enter into force between 2021 and 2022. Among the issues still under discussion are nuclear and gas power, which have been a source of significant debate.

6. How will the system evolve over time?

The EU Green Taxonomy will be reviewed every three years, to ensure that it’s optimally adapted to the fight against climate change.

7. What impact will it have on the real estate sector?

Accounting for 40% of energy consumption and 36% of CO2 emissions, real estate is Europe’s highest-polluting sector. The group of experts charged with preparing a report for the Council of the European Union has opted for a transitional approach. New buildings will have to be close to zero-carbon, without necessarily reaching this target. Criteria will be adjusted progressively until zero carbon is achieved, giving the industry time to prepare for this change. 

The EU Taxonomy could very well push Europe to the forefront of the energy transition, but only if everyone takes action at their own level. In the real estate sector, many options are available today to help lower the carbon footprint and reduce environmental impact. To do your part, download our checklist and find out how to lower your energy consumption: