Person drawing on whiteboard behind stained glass window
€1 trillion. That is how much the EU Green Deal is expected to cost by 2030. To raise this astronomical sum, the EU hopes for €279 billion from public and private investments by the end of the decade, though experts caution not to put too much emphasis on the exact figure; it is the intention that is the salient point. But how do you really define what is and isn’t sustainable?
This is where the new EU Taxonomy, which went into effect 1 January 2022, comes in: the Taxonomy sets clears rules and guidelines for how businesses must report on their climate and environmental impact, which is expected to have a far-reaching impact on how businesses invest, as well as help unlock financing for businesses that can prove a clear sustainability impact.
“The investment world is looking at the EU taxonomy and will use it as a benchmark to define what is and what isn’t sustainable,” says Patrick Moloney, Market Director for Strategic Sustainability Consulting at Ramboll, in a recent webinar.
He and his colleagues in Ramboll’s Management Consulting division have learned a lot from helping companies in multiple sectors prepare for the EU Taxonomy. We share three key takeaways from the webinar to help you begin aligning your business with the new rules. Access the full webinar here.
The EU taxonomy currently only applies to large companies but our experts believe the rules will trickle down to small-and-medium- sized enterprises (SMEs) through the supply chain.
The new rules are likely to be transformative: “If you take transition to a circular economy, [the taxonomy] will be transformative for how we behave in certain sectors,” says Patrick Moloney. Watch this snippet for a break-down of how the six environmental objectives in the taxonomy will disrupt business as usual:
“There was no manual for how to apply the EU taxonomy, so when we started working with companies to apply the new rules, it was learning by doing. Everything we will go through is from personal experience of applying the EU taxonomy in real life.”
In this short clip, Patrick Moloney highlights the most common challenges businesses face when applying the new rules:
“This year is not so much about finding your final alignment percentage, because honestly it will likely be zero,” says Meike Verhey, Sustainable Finance Consultant at Ramboll. A sobering message, but there’s a silver lining as Meike explains in this snippet:
The new rules can be daunting, and the best place to start is by defining how much your business is covered by the new rules.
“What we are saying to all our clients is, don’t get overwhelmed by all the stages of the process. Instead, focus on the first phase: defining which of your activities are covered by the taxonomy,” says Patrick Moloney.
To see whether your business is covered by the EU taxonomy and a quick introduction to the most important terms, dates, and criteria, please visit Ramboll’s quick guide to the EU taxonomy here.