How should corporates act to be taxonomy-compliant?

The EU Taxonomy's April Package and Fit for 55 are two recent European Climate Regulation packages. From a legal perspective, these can especially be challenging for corporates. We invited two experts from Dentons to our studio for discussing this aspect: Dr. Gabriele Haas and Dr. Clemens Maschke. Both are partners at Dentons Europe LLP.

The EU Taxonomy directive sets various criteria for investors for evaluating the sustainability of business activities. Capital markets will increasingly require a solid sustainability reporting of corporates to differentiate between green and green-washed investments.

In addition to this framework, the recently announced “Fit for 55” package sheds more light on how corporates have to decarbonize their business cases. For example, the package explicitly mentions power purchase agreements (PPAs) as being a preferable solution for reducing a corporate’s Scope 2 emissions. Therefore, these new regulatory frameworks are fostering liberalized solutions for managing carbon footprints.

However, the EU Taxonomy and the Fit for 55 package also induce a lot of uncertainty, also and especially from a legal perspective concerning the question: How should corporates act to be taxonomy-compliant?