Abstract Compliance with green requirements is becoming increasingly important in assessing the performance of companies. The new CSRD legislation requires a wider range of companies to produce ...sustainability reports and their content is influenced by the EU's taxonomy regulation setting out the framework for sustainable finance. The disclosure of information affects the perception of companies' sustainability performance, which will affect their access to financial resources and development opportunities. The main question is, both in theory and in practice, how companies can comply with the legislation in the future. It is essential for the competitiveness of Hungary's food industry to keep pace with future environmental sustainability requirements, so we examined the sustainability reporting practices of the sector's key companies in terms of their contribution to the environmental objectives set out in the taxonomy regulation. The research fits well with the EU's overall green transition regulatory procedure and our study is gap-filling at macro-regional and sectoral levels. The sustainability reports were assessed by content analysis using a scoring method. The results show that the sustainability reporting practices of food processing companies in Hungary differ significantly. Furthermore, greater emphasis must be placed on reporting and the credibility of the reports to meet future expectations. Foreign-owned companies and companies with more than 500 employees attribute greater importance to reporting. In the food processing sector, the disclosure of information and data under the taxonomy objectives of mitigation of climate change, sustainable use of water and marine resources, and transition to a circular economy was most common.
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•Performed a comparative cradle-to-grave LCA for adsorption dehumidifiers.•Identified the key influencing factors of selected environmental impact categories.•The usage phase ...contributes the most (65% − 99%) in all impact categories.•Supply humidity, climatic data, and operational hours are the key parameters.
Desiccant wheel dehumidification technology is essential within industrial applications to maintain indoor humidity levels and provide low dew points. While the need for desiccant wheel dehumidification has increased in several industrial sectors, it is still an energy-intensive method undergoing rapid technological development. The lack of comprehensive life cycle assessment studies and recently introduced taxonomy by the European Union (EU) prompt the urgency of evaluating the environmental impacts of dehumidification systems. This study performs a comparative life cycle assessment for two desiccant wheel dehumidifiers for industrial applications. We identify the key influencing factors of selected environmental impact categories, e.g., climate change, ozone depletion, and fine particulate matter formation. The study reveals that the usage phase contributes the most, varying between 65% and 99% of the overall impact in all categories, with electricity consumption as the key driver. The cradle-to-gate stage, which shows the second biggest impact (up to 26%), has its most significant share in fine particulate matter formation. The end-of-life (disposal) contributions are insignificant, with an average impact of less than 1%. The scaling factor, operational hours of the systems, the target supply humidity, and the climatic data are the critical parameters for environmental performance. Potential for improvement is seen for an increased recycled content during the cradle-to-gate stage to reduce the impact from raw material inputs and the integration of sustainable energy technology as well as the connection of the systems to energy-efficient equipment during the operational phase. The study could serve as an example on how the EU Taxonomy can be applied for investigating the environmental sustainability of dehumidification systems.
We analyze the potential of the European Union (EU) Taxonomy (ET) for Sustainable Activities to mobilize investments for the sustainability transition toward urban nature-based solutions (UNBS). We ...map the current investment landscape of UNBS in Europe and combine this mapping with document analysis of UNBS inclusion in the ET to understand how the ET might help overcome the well-documented barriers to UNBS finance. We suggest that the ET has a legitimizing effect on UNBS as climate investments, which can support their uptake, but also conclude that only some UNBS subtypes are explicitly included when they fit with existing investment classes. In particular, the ET (1) disregards innovative - and specifically urban - UNBS types and (2) fails to provide incentives for investments that can deliver multiple sustainable objectives, which would enhance the investment case for UNBS. Since the current investment landscape of UNBS is characterized by a strong presence of public actors and a high incidence of co-financing, we recommend that public actors leverage the ET to obtain private funding for UNBS via (green) bond issuance and public-private co-finance instruments. Our analysis indicates that the ability of the ET to upscale investments for specific sustainability transitions depends on the interplay among their current investment landscapes, specific financing barriers, and explicit inclusion in the ET.
•The EU Taxonomy (ET) explicitly promotes investment only into specific urban nature based solutions (UNBS).•The effectiveness of the ET for unlocking private investments is likely to be heterogeneous across urban NBS.•ET points out institutional investors having potential of investment in UNBS by holding shares of firms that fund UNBS.•Under the ET, some financial instruments have higher capacity of scaling-up investments into UNBS – corporate green bonds.•The ET may serve as a vehicle for enabling public-private co-investments and accelerate sustainability transitions.
This paper represents qualitative research of the concept of taxonomy within the European Union (EU), drafted with the sole purpose of establishing the presence of the environmental elements specific ...to sustainable development within the economic activity. The EU taxonomy is an important mechanism which offers coherence in using every instrument conceived for accomplishing the ecological objectives of the environment. The concept of taxonomy refers to the investment funds of big economic entities within EU and beyond, which need to provide information about their environmental related activities. The purpose of this paper is to highlight the cooperation between the regulation authorities and the technical experts in the domain (TEG), which offer a starting point in this journey from their experience with environmental, social and governance (ESG) information reporting. Therefore, the intention EU has regarding the taxonomy is guiding the capital towards the ecological and the implementation of a new universally available classification system of sustainable investments at an international level.
•This paper discusses the EU Taxonomy in the context of Environmental, Social, and Governance (ESG) ratings.•Using EU Taxonomy-related firm data in tobit regressions, we show that environmental ...ratings from three out of four ESG data providers are significantly related to the EU Taxonomy.•The results suggest that the potential for reducing measurement divergence has not yet fully materialised.
This paper discusses the EU Taxonomy in the context of Environmental, Social, and Governance (ESG) ratings. ESG firm-level ratings tend to differ across ESG data providers, affecting investment decisions due to uncertainty about a firm's sustainability performance. We argue that the EU Taxonomy can support the reduction of this divergence. Using EU Taxonomy-related firm data in tobit regressions, we show that environmental ratings from three out of four ESG data providers are significantly related to the EU Taxonomy. However, our results suggest that the potential for reducing measurement divergence has not yet fully materialised. Our results have implications for investors, ESG data providers, and policy makers.
In the face of negative changes in climate change and the natural environment, the financial system is obliged to change its financial mechanisms as efficiently as possible to help the economy ...transform according to the green rate concept. The taxonomy published by the EU (2021) is an economic classifier, with the help of which businesses can transform their processes and banks can select green projects. Sustainability and the fight against climate change is one of the strategic directions of the Bank of Lithuania, so in order to achieve better results, it would be appropriate to combine state and business investments. And although the sustainability of business activities is becoming a priority, commercial banks providing loans do not yet have clear criteria or a unified evaluation system for distinguishing environmentally friendly business. In Lithuania, the banking sector is guided by ESG principles, the EU taxonomy regulation, and other autonomously created criteria that allow to decide whether to promote one or another business that could potentially create not only financial, but also additional, sustainable ecological returns. According to the principles of UN Responsible Banking, there are already actively committed banks that contribute to the UN Sustainable Development Goals and the Paris Agreement for integrated sustainability as a natural element necessary in the long term. The article analyzes the current topic of the green exchange rate in the banking sector, uses the systematization and comparative analysis of scientific literature. The concept of green finance is discussed; changes in bank activities and a new look at creditable businesses according to the green rate standard and the transformation of banks through the criteria of their activities.
The European Green Deal brings into attention a new strategy to support the transition to a society that will meet the challenges of climate change and environmental degradation, improving the ...quality of life. Given the multitude of actors involved in the process of collecting, processing and communicating information on the impact of different activities on the environment and citizens, it is necessary to have a legal framework on sustainability reporting as rigorously as possible, in order to ensure the comparability in time and space of the information provided. For this information, reported at the European Union (EU) level, to allow decision-making at the right time, it is necessary to use digital technologies to facilitate the process of collecting, analysing and interpreting information. In this paper the authors tried to offer a practical example on how eXtensible Business Reporting Language (XBRL) works in order to highlight the benefits of this modern language in the context of the Green Deal. In this regard, using Altova MissionKit 2023, the authors designed an XBRL taxonomy which is the basis for the development of an instance in which we find some representative indicators for the circular economy, an environmental objective of the EU taxonomy. The XBRL language simplifies the transfer of information from sustainability reports prepared in different countries to the European Commission, improving and accelerating the decision-making process.
We develop the first top-down method to estimate the greenness of financial portfolios, in terms of alignment to the EU Taxonomy for sustainable activities. We also develop a method to estimate, at ...the same time, the portfolio exposure to climate transition risk. We provide sector-level, standardized and transparent coefficients for both estimates, based on definitions of greenness and transition risk that are applicable across countries. We analyse the portfolios of Euro Area investors in 2022, based on the confidential Securities Holdings Statistics of the European Central Bank. We find that, overall, the greenness of Euro Area investors’ portfolios is lower than their exposure to transition risk (2.8% vs. 11.7%).
Across financial institutions, we estimate greenness and exposure to transition risk, respectively, at 3.2% and 12% for investment funds, at 0.8% and 5% for banks and at 4.8% and 15.1% for insurers. Our analysis also shows that investors with large amounts invested in green activities can have at the same time large exposures to transition risk.
The EU Taxonomy is the first standardised and comprehensive classification system for sustainable economic activities. It covers activities responsible for up to 80% of EU greenhouse gas emissions ...and may play an important role in channelling investments into low-carbon technologies by helping investors to make informed decisions. However, especially in transition sectors much depends on the stringency of the technical performance thresholds that the Taxonomy applies to economic activities that are not yet 'green'. This paper shows that for several sectors, the thresholds are not yet on track to support the transition towards climate neutrality. To this end, we analyse a large-scale public consultation with detailed responses to the specific thresholds from a variety of stakeholders. Especially for emission-intensive sectors, two distinct use cases of the Taxonomy can be distinguished: For new investments, criteria should be stricter than for current activities of companies. We also argue that for the sectors not covered by the Taxonomy, there is a need to differentiate between low-emissions activities and high-emission activities, which are incompatible with a low-carbon future.
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