EU Taxonomy for Sustainability (cepAdhoc)
After tough negotiations, the European Parliament and EU Member States have agreed on an EU taxonomy. They have thereby provided a binding definition for environmentally sustainable activities and investments. cep has assessed the agreement in an Adhoc.
cep takes a critical view of the fact that the EU taxonomy leaves no room for other definitions of "sustainability" which could be stricter or more lenient or which could include other environmental objectives. This is inappropriate because investor preferences are not identical. cep argues that "sustainability" should not become an aim of financial market regulation in its own right as this could give rise to conflicts with the risk-based approach of financial market regulation and thereby jeopardise financial market stability.