EU platform on sustainable finance report: simplifying the EU taxonomy to foster sustainable finance
The EU Platform on Sustainable Finance (PSF)[3] has published a report proposing recommendations to simplify the EU Taxonomy, aiming to reduce the reporting burden for companies by over a third.
The report identifies core areas for improvement, including data access, simplification, and coherence with other regulations.
The initiative is part of the European Commission’s broader strategy to alleviate administrative and reporting requirements, particularly targeting sustainability regulations in an upcoming "Omnibus" package.
Key proposals include a new lighter compliance assessment for Do No Significant Harm (DNSH)[4] criteria, refined reporting methods for banks' green asset ratios, and customised guidance for small and medium-sized enterprises (SMEs)[5] to access sustainable finance – read more.
24 U.S. states commit to Paris Agreement goals after Trump exits accord
Despite President Trump's withdrawal from the Paris Agreement, 24 U.S. states, under the US Climate Alliance, have reaffirmed their commitment to the accord's climate goals, pledging to continue efforts to reduce climate pollution.
The Alliance submitted a letter to UN Climate Change Executive Secretary Simon Stiell, emphasising their ambition to advance climate solutions and their determination to achieve U.S. targets for greenhouse gas (GHG)[6] emission reductions of 50%-52% by 2030 and 61%-66% by 2035.
The governors highlighted that their states are on track to meet interim GHG reduction goals of 26% by 2025, citing various initiatives including carbon markets, clean energy standards, and methane reduction programmes across multiple sectors.
The Alliance plans to convey a strong message of ongoing climate action in the U.S. at the upcoming UN Climate Change Conference (COP30) in Brazil, emphasising that climate commitments will persist regardless of federal leadership changes - read more.
Mixed views emerge following UK taxonomy consultation
Launched in November 2024, the UK’s consultation seeks to determine whether a green taxonomy could contribute to the government’s goal of creating a world-leading sustainable finance framework. The EU taxonomy remains the most established, and there’s pressure for the UK to align with global standards to avoid falling behind.
As the UK government’s consultation on a potential green taxonomy nears its end, opinions in the financial sector are divided. Some, like the UK Sustainable Investment and Finance Association, view the taxonomy as crucial for transparency, tackling greenwashing, and directing capital to sustainable investments. However, others question its benefits, arguing that many in the UK financial industry are already using the EU taxonomy and other international standards, suggesting a UK version could add unnecessary complexity and costs.
Advocates argue that a science-based, practical UK taxonomy aligned with the EU framework would provide the much-needed clarity for investors and prevent adoption hurdles whilst maintaining competitiveness.
