Environmental and social issues have been pressing since the beginning of the European Union’s Sustainable Finance Strategy. Therefore, in 2020, the European Parliament approved the European Green Deal to ensure sustainable growth and environmental protection. As part of this, the Environmental Taxonomy provides a classification system for environmentally sustainable activities, which gives clarity and certainty for investors and decision-makers.
Two years later, on the 28th of February 2022, the Platform on Sustainable Finance published the final report on Social Taxonomy. A next step in harmonizing the measurement of social sustainability. The Social Taxonomy will aid investors to make informed and consistent decisions and helps to direct resources toward socially responsible activities and companies.
The environmental and social taxonomy are not mutually exclusive, rather, they complement each other and advance the progress toward green and just transitions.