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Regulations

The Social Taxonomy

Mars 23, 2022
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6
min read

A proposal for a European regulatory framework to promote the financing of activities that respect human rights and demonstrate good corporate governance.

The Social Taxonomy in brief

The Social Taxonomy is the first report published by members and observers of the Sustainable Finance Platform.

On Monday 28 February 2022 the Sustainable Finance Platform (SFP) published its Social Taxonomy report.

The goal of the social taxonomy is to direct capital flows to companies and activities that respect human rights and demonstrate good corporate governance.

The social taxonomy proposal has three objectives:

  1. decent work (including for value-chain workers);
  2. adequate living standards and wellbeing for end-users;
  3. inclusive and sustainable communities and societies.

The first delegated act on sustainable activities for climate change adaptation and mitigation objectives was published on December 9, 2021 and applicable on January 1, 2022. The second delegated act for the other objectives will be published during 2022.

How does it work?

The Social Taxonomy report is a continuation of and complementary to the Environmental Taxonomy. The report thus includes the main methodological axes of the Environmental Taxonomy:

  1. the development of social objectives;
  2. types of substantial contributions;
  3. do no significant harm to other objectives (DNSH);
  4. and minimum safeguards.

It does, however, include sub-objectives specifying the 3 objectives.

This proposal by the experts will be the subject of a future examination by the European Commission.

https://ec.europa.eu/info/files/280222-sustainable-finance-platform-finance-report-social-taxonomy_en

Disclaimer: this page is a proposal for a synthesis and popularization of the texts, these texts are evolving and complex, this synthesis is by definition incomplete, and may be obsolete due to regulatory changes. It is necessary to always refer to the official texts available on ec.europa.eu. Photo by Duy Pham on Unplash

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