The COVID-19 pandemic has underlined the need for both social and green lenses to be applied to public and private investment. However, there are fewer developed global and local social standards and reporting requirements for the “S” than the “E” despite a pressing need.
In July 2021, the Platform on Sustainable Finance published its first draft report on a proposal for a social taxonomy, which assesses the merits of a social taxonomy in addition to the green taxonomy, and explores possible avenues to complement the existing taxonomy.
The Institute strongly welcomes the EU’s foresight in developing a social taxonomy in addition to the green taxonomy and, in August 2021, the Institute submitted its response to the Platform’s consultation on the draft report.
In line with the response template, we provided our views on six areas: merits and concerns, structure, harmful activities, governance objectives, a model for linking an environmental and social taxonomy, and general expectations from the social taxonomy.
The document below outlines the key excerpts from our response.
The Platform will be considering stakeholder input to advise the European Commission in autumn 2021 on potential extensions of the taxonomy framework beyond environmentally sustainable activities.