European Parliament adopted its position on taxonomy for sustainable investments
On 28 March 2019, the European Parliament voted to establish taxonomy for sustainable finance. The Members of the Parliament rejected the proposals to rank all economic activities according to their social and environmental impact. In addition, the Parliament adopted a request to make an impact assessment on the establishment of “brown list” of investments meaning the investment that have a significant negative impact on the environment. The report was approved by 316 votes to 93, with many green and left-wing MEPs choosing to abstain.

CEPF welcomes the fact that Sustainable Forest Management (SFM) has been included in the scope of the proposed regulation and that the forest management is taken into account as a holistic concept, as agreed upon at the Ministerial Conference on the Protection of Forests in Europe[1] and as referred in the 2013 EU Forest Strategy. Therefore, it was essential that MEPs rejected the attempts which would have significantly narrowed down the holistic scope of sustainable forestry activities imbedded in the SFM definition.

In addition, the just adopted report rejected the amendment that would have embedded cascading use of resources into the taxonomy. This would have been highly problematic due to fact that the “cascading use” is a concept that does not follow market-based approach, it lacks common understanding and precise definition, and, therefore, its applicability in the legislation cannot be operationalised. 

The Parliament agreed to include indicators to the requirements to strengthen the technical screening criteria. In this respect, CEPF is convinced that the Commission proposal provides a sufficient, transparent and less burdensome approach to establish a system that would encourage the investors to make sustainable investments. In addition, it is important to draw the attention to the existing already comprehensive sets of criteria and indicators that are widely endorsed and used by the Member States as a consequence of broad application at national forest legislations of the definition of Sustainable Forest Management.

Member States are expected to discuss their position on the rules in April. It has been confirmed that inter-institutional negotiations will only take place after the European elections.