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Peter Friedrich / Finn Wendland IW-Policy Paper No. 14 23. July 2021 Ecologically sustainable or not?: The introduction of the EU Taxonomy for Sustainable Activities

The EU Taxonomy for Sustainable Activities (EU Taxonomy) is the lead instrument to integrate and promote sustainability in capital markets across the EU.

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The introduction of the EU Taxonomy for Sustainable Activities
Peter Friedrich / Finn Wendland IW-Policy Paper No. 14 23. July 2021

Ecologically sustainable or not?: The introduction of the EU Taxonomy for Sustainable Activities

German Economic Institute (IW) German Economic Institute (IW)

The EU Taxonomy for Sustainable Activities (EU Taxonomy) is the lead instrument to integrate and promote sustainability in capital markets across the EU.

This study sheds light on the implications of the EU taxonomy for financial market participants and its potential to strengthen transparency and comparability of information for companies and investors. By setting qualitative and quantitative technical screening criteria, the EU taxonomy identifies the extent to which economic activities, businesses and assets are compatible with six overarching environmental targets. The alignment with the EU taxonomy should help companies to access new sources of sustainable finance on capital markets and to close the investment gap to achieve international climate targets. By integrating the environmental costs and long-term risks of climate change associated with certain economic activities into financial instruments, the EU taxonomy provides the potential to better link creditors and debtors, to improve the functioning and allocative efficiency of capital markets, and to leverage finance for sustainable investments. To strengthen its credibility and effectiveness over the long-term, the EU taxonomy should cover relevant sectors and actors of the entire economy, it should clarify remaining uncertainties on the interpretation of the binary classification system, and it should emphasize forward-looking investment plans and indicators in order to enable the green transformation.

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The introduction of the EU Taxonomy for Sustainable Activities
Peter Friedrich / Finn Wendland IW-Policy Paper No. 14 23. July 2021

Ecologically sustainable or not?: The introduction of the EU Taxonomy for Sustainable Activities

German Economic Institute (IW) German Economic Institute (IW)

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Christian Rusche / Thilo Schaefer in Intereconomics External Publication 8. April 2024

Is the EU Fit for 55 and Beyond?

Ursula von der Leyen was elected President of the European Commission by the European Parliament in July 2019. She assumed office in November 2019 and unveiled the European Green Deal in December 2019 (European Commission, 2023a) as a focal point of European ...

IW

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Thomas Puls Expertise 30. November 2023

Compendium 5.4: CO2 Regulation of Road Transport in Europe

With the Compendium CO2 Regulation in Europe, the IW has been providing the interested public with a comprehensive collection of data on the development of CO2 emissions from passenger car traffic in the European Union, as well as on the applicable regulatory ...

IW

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