The EU taxonomy is a classification system that establishes a list of economically sustainable environmental activities. It could play a critical role in assisting the EU in scaling up sustainable investment and implementing the European Green Deal. The EU taxonomy would provide appropriate definitions for which economic activities can be considered environmentally sustainable to companies, investors, and policymakers. As a result, it should provide investors with security, protect private investors from greenwashing, assist companies in becoming more climate-friendly, reduce market fragmentation, and assist in shifting investments to where they are most needed.
