The EU Taxonomy Regulation (Regulation 2020/852) entered into force on 12 July 2020. Since then, the EU has implemented several Delegated Acts to further expand the framework. Under the taxonomy regulation, large, public-interest undertakings are required to report on the proportion of their economic activities that meet certain technical screening criteria.
About the EU Taxonomy
The EU taxonomy is a classification system that sets out a list of environmentally sustainable economic activities. It forms part of the EU’s plan to scale up sustainable investment and implement the European Green Deal.
The taxonomy was developed in order to provide well-defined, harmonized criteria for when economic activities can be considered sustainable. It sets out robust, science based technical screening criteria which activities need to comply with to be considered green. By providing this harmonized standard, the taxonomy aims to increase transparency; create security for investors; prevent greenwashing; help companies become more climate-friendly; mitigate market fragmentation; and help investors compare investments across Member States. This will help guide investments where they are most needed. By directing investments towards sustainable projects and activities across the EU, the taxonomy aims to help meet the EU’s 2030 and 2050 climate and energy targets.
The Climate Delegated Act (Regulation 2021/2139), the Complementary Climate Delegated Act (Regulation 2022/1214), and the Environmental Delegated Act (currently being drafted) set out a list of eligible activities along with technical screening criteria for when the activities can be considered sustainable. A taxonomy eligible economic activity is an economic activity that is described and has technical screening criteria set out in the taxonomy. So far only the Climate Delegated Act is in force and covers more than 100 taxonomy eligible economic activities. The taxonomy’s delegated acts describe and assign criteria on a high level, meaning they do not refer to only one specific economic activity, but to categories of economic activities. For example, it sets criteria for the general category of ‘manufacture of cement’ rather than the manufacturing of cement in one specific plant by one specific operator.
The Climate Delegated Act focuses on the climate change mitigation and climate change adaptation objectives and sets out technical screening criteria for activities that can make a substantial contribution to climate change mitigation and/or climate change adaptation. It also sets out ‘do no significant harm’ criteria for these activities to ensure that the economic activity meets minimum standards and does not cause harm to any of the other objectives. The taxonomy also requires that minimum social safeguards are met by the company.
Taxonomy alignment can be broken down into five steps:
1. A company must have an eligible activity as described in one of the delegated acts.
2. The eligible activity should be assessed against technical screening criteria set out in the taxonomy’s delegated acts.
3. The activity must make a substantial contribution to one or more of the climate and environmental objectives relevant to that activity.
4. The activity should not do significant harm to the other remaining activities.
5. The company should fulfill the minimum social safeguard standards based on OECD and UN guidelines.
EU Taxonomy in Elopak
Elopak is not yet covered by the taxonomy regulation as our activities are not covered by the delegated acts. Screening criteria for packaging is expected to be included in the Delegated Act in the near future. Still, we find it important to support the implementation of the regulation, creating more transparency and comparability in a field that needs increased awareness and attention. Therefore, we performed a taxonomy assessment during 2022, defining the scope and eligibility of our activities.
Elopak’ s activities have been mapped according to the activities defined in the Climate Delegated Act. Production of packaging materials and filling machines are not yet covered and thus categorized as non-eligible following the description stated in the regulation. Therefore, we assessed our activities against the criteria for food and beverage production, as these criteria are relevant for our customer’s activities. The assessment concluded that several of the criteria are not relevant for our activities, thus they are not aligned.
Our social safeguards assessment can be found here.