| EU Taxonomy for Sustainable Activities |
| Source: |
London Stock Exchange |
| Domain: |
Finance/Sales |
| Prerequisites: |
Adherence to Green Bond Principles
EU Taxonomy
Dedicated internal teams for tracking
|
| Potential Impact: |
Substantial |
| Application to Armenia |
The EU Taxonomy can be introduced in Armenia through respective executive order (or through law) by regulator with the purpose to establishing the parameters under which a loan can be labeled green and defining the list of “green” projects. This will be instrumental for setting up incentives for such products (e.g., lower reservation requirements), as it has been identified through the first phase of the Readiness Project. |
The EU Taxonomy is one of the most significant developments in sustainable finance and will have wide ranging implications for investors and issuers working in the EU, and beyond. It is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. The Taxonomy sets performance thresholds for economic activities which:
- make a substantive contribution to one of six environmental objectives:
- Climate change mitigation;
- Climate change adaptation;
- Sustainable and protection of water and marine resources;
- Transition to a circular economy;
- Pollution prevention and control;
- Protection and restoration of biodiversity and ecosystems;
- do no significant harm (DNSH) to the other five, where relevant; and
- meet minimum safeguards
The performance thresholds will help companies, project promoters and issuers access green financing to improve their environmental performance, as well as helping to identify which activities are already environmentally friendly. In doing so, it will help to grow low-carbon sectors and decarbonise high-carbon ones.
