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The EU taxonomy defines criteria for economic activities committed to a net zero emission by 2050, and other environmental goals. Its overall goal is to direct investments to economic activities aligned with the European Green Deal and, thereby, classified as sustainable. For industrial organizations, there is an urgent need to develop adaptive capabilities to meet the requirements set by the new taxonomy. The present scoping review contributes by analyzing academic publications on this topic through the lens of a complex science and systems approach. It analyzes academic publications on the EU taxonomy, related to industrial organizations and their development of socio-technical systems. At the initial stage, 526 scientific publications were retrieved from three web repositories (Scopus, World of Science, and Scholar). Only eight publications matched the selection criteria and constitute the data of this study. Results indicate that there is a lack of holistic perspectives and an unbalanced system response to the EU taxonomy. Adopting a systems approach can help industrial organizations navigate the intricate dynamics of a sustainable transition, striking a balance between adhering to the EU taxonomy and maintaining market competitiveness. The findings emphasize the importance of trans-disciplinary approaches and the need for agile and adaptive ways of learning inside industrial organizations. [ABSTRACT FROM AUTHOR]

This experimental research investigates the effect of different types of environmental information on investor judgment. By examining three experimental cases varying the level of environmental disclosure, we evaluate the investment judgments of professional (Study 1) and private German investors (Study 2). Primarily, we investigate whether traditional, commonly disclosed environmental information affects investor judgments. Furthermore, we explore the effects of linking non-financial reporting elements to quantitative financial measures through the EU taxonomy by adding taxonomy indicators. Specifically, we operationalized the case where companies fall into a category of poor environmental performance by taxonomy classification. We find that only traditional environmental disclosure in combination with standardized taxonomy-aligned information (below average), influences the investment judgment. However, professional investors exhibit a significantly negative response, while private investors show a significantly positive reaction when constraining reporting flexibility through the inclusion of standardized taxonomy measures with poor performance. Consequently, we conclude that the connection between non-financial reporting elements and quantitative standardized financial measures enhances transparency for professional investors. Private investors, on the other hand, reward additional taxonomy-aligned environmental information irrespective of its content. This implies that environmental information generally conveys positive signals to private investors, but uncertainty in investment judgment can be assumed. [ABSTRACT FROM AUTHOR]

This paper contributes to the understanding of media discourses surrounding the sustainability of nuclear energy, particularly within a crisis context. The study examines the implications of the adoption of the Complementary Delegated Act on EU taxonomy by the European Commission on July 6, 2022, which officially categorises nuclear energy as sustainable. Employing a critical discourse analysis (CDA) methodology, the research explores the discourse strategies --nomination, predication, and argumentation-- utilised across 695 news articles. The findings reveal the intricate representation of nuclear energy's sustainability across the media. The Russian-Ukrainian conflict amplifies favourably the nuclear energy view as a reliable and sustainable energy source. However, the media discourse on nuclear energy's sustainability reveals a variety of viewpoints. These varying outlooks provide essential insights for shaping effective energy policies. This research contributes valuable insights into understanding how media shapes and influences public perception of sustainability energy policies, amplifying specific actors' voices and steering discourse toward distinct trajectories. Such insights are crucial in crafting energy policies. [ABSTRACT FROM AUTHOR]

The EU taxonomy, introduced in 2022, is a comprehensive classification system categorizing environmentally sustainable economic activities. This study examines the impact of incorporating EU taxonomy data into corporate environmental disclosure on investor judgments. Through five experimental cases involving standard environmental disclosure and additional moderate/positive/negative taxonomy‐aligned information, we assessed institutional and retail investor evaluations. Results reveal that taxonomy inclusion significantly influences investor judgments, particularly among institutional investors who are more adept at recognizing and penalizing negative information. Clear taxonomy‐aligned data in combination with standard environmental information shows no steering effect among retail investors. Despite underperforming taxonomy indicators, environmental information generally conveys positive signals to retail investors. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Abstract This research aims to initiate academic discussion on the European Union (EU) social taxonomy for the purpose of promoting sustainable economic activities that ultimately contribute to achieving the United Nations’ sustainable development goals (SDGs) in the EU. The paper examines the historical evolution of the social taxonomy concept and presents the chronological order of the regulatory advancements that have paved the way for the establishment of both the EU environmental and social taxonomies. This study emphasizes the role of the EU environmental taxonomy as the frontrunner and highlights three fundamental distinctions between taxonomies in terms of objectives, foundations, and measurability. By defining the key performance indicators applicable to entities engaged in taxonomy-aligned economic activities, the paper offers a tabulated framework to understand the core focus areas, sub-objectives, and types of substantial contributions related to each of the three social objectives outlined in the EU taxonomy. Moreover, this paper aims to emphasize the contemporary challenges and the prospective avenues for future research in the field of social taxonomy.

This research aims to initiate academic discussion on the European Union (EU) social taxonomy for the purpose of promoting sustainable economic activities that ultimately contribute to achieving the United Nations' sustainable development goals (SDGs) in the EU. The paper examines the historical evolution of the social taxonomy concept and presents the chronological order of the regulatory advancements that have paved the way for the establishment of both the EU environmental and social taxonomies. This study emphasizes the role of the EU environmental taxonomy as the frontrunner and highlights three fundamental distinctions between taxonomies in terms of objectives, foundations, and measurability. By defining the key performance indicators applicable to entities engaged in taxonomy-aligned economic activities, the paper offers a tabulated framework to understand the core focus areas, sub-objectives, and types of substantial contributions related to each of the three social objectives outlined in the EU taxonomy. Moreover, this paper aims to emphasize the contemporary challenges and the prospective avenues for future research in the field of social taxonomy. [ABSTRACT FROM AUTHOR]

Spent coffee grounds (SCG) contain coffee oil with a significant amount of unsaturated fatty acids. In a publicly funded research project, SCG from the industrial production of instant coffee was investigated regarding their applications in the material processing industry. The isolation, functionalization, and application of the unsaturated fatty acids was a central objective. Fatty acids enclosed in the SCG were released in the form of fatty acid methyl esters by means of an in situ process of esterification and transesterification. [ABSTRACT FROM AUTHOR]

Sustainable finance taxonomies such as the European Union (EU) taxonomy can support the transition to a climate-neutral economy. As a classification system, these taxonomies serve to offer transparency and guidance as to how capital flows can be shifted to sustainable and environmentally-friendly activities. In this Weekly Report, we analyze 26 sustainable taxonomies from countries and regions around the world using five criteria. Our study shows that although many taxonomies follow a holistic sustainability approach, mandatory criteria have often yet to be developed. The share of a country or region's emissions that is covered by the taxonomy varies considerably, as the taxonomies follow different approaches for determining the activities that are aligned with them. Taxonomies often only apply to a limited group of market participants and are rarely linked to mandatory reporting obligations. The results emphasize that better coordination between the existing taxonomies worldwide is needed and that the criteria and thresholds for selecting activities in alignment with taxonomies should be in accordance with the Paris Agreement. This way, taxonomies can develop their full potential in guiding the transition. [ABSTRACT FROM AUTHOR]

Copyright of Deutsches Institut für Wirtschaftsforschung: DIW-Wochenbericht is the property of DIW Berlin and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper contributes to the understanding of media discourses surrounding the sustainability of nuclear energy, particularly within a crisis context. The study examines the implications of the adoption of the Complementary Delegated Act on EU taxonomy by the European Commission on July 6, 2022, which officially categorises nuclear energy as sustainable. Employing a critical discourse analysis (CDA) methodology, the research explores the discourse strategies –nomination, predication, and argumentation– utilised across 695 news articles. The findings reveal the intricate representation of nuclear energy’s sustainability across the media. The Russian-Ukrainian conflict amplifies favourably the nuclear energy view as a reliable and sustainable energy source. However, the media discourse on nuclear energy’s sustainability reveals a variety of viewpoints. These varying outlooks provide essential insights for shaping effective energy policies. This research contributes valuable insights into understanding how media shapes and influences public perception of sustainability energy policies, amplifying specific actors’ voices and steering discourse toward distinct trajectories. Such insights are crucial in crafting energy policies.

Copyright of Studies in Law & Economics / Studia Prawno-Ekonomiczne is the property of Lodz Scientific Society / Lodzkie Towarzystwo Naukowe and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this paper, we review the literature on industrial ecosystems and EU Taxonomy of sustainable activities. We then measure the size, dynamics and specialisation of the industrial ecosystems in Italy - as defined by the European Commission. Subsequently, we try to assess how much different sectors will be involved in the Taxonomy of sustainable activities: Manufacturing, Transportation, Electricity and Water Supply are those strongly involved in terms of employees. EU Taxonomy will radically change in the near future the financial reporting requirements and strategic management actions in the corporate system towards green transition. Firms need to improve their level of knowledge of the Taxonomy and identify suitable actions in order to align with it.

Financial market is expected to play an important role in transition towards more sustainable setup of the business environment. The European Commission published the EU’s Strategy for Financing the Transition to a Sustainable Economy in 2021, requiring the inclusion of environmental, social and governance considerations into investment decision making. Yet, small, open EU economies, such as Slovakia, are in a specific position when implementing this legal framework. For instance, Slovakia does not have any meaningful stock market to speak of, although its bond and collective investment markets perform better. To assess the adoption of sustainable finance elements and to assess the convergence on the Slovak bond market towards standard practice, we investigated current practices on the corporate bond market of nonfinancial corporations. We conducted our research through a review of corporate bonds prospectuses published during 2020-22, in which, to assess current market practices, we examined and evaluated selected criteria and indicators related to issuers and bonds and compared them. These criteria include for example issuer´s business and purpose of finance, form, yield, security, or transferability of bonds. We find that relevant variable criteria and indicators related to reviewed bonds, compared in our research, are similar, indicating that the market converged into a standard practice. Finally, we find almost no evidence of adoption of the sustainable finance elements although there are hints of market uptake of sustainable practices.

The EU taxonomy defines criteria for economic activities committed to a net zero emission by 2050, and other environmental goals. Its overall goal is to direct investments to economic activities aligned with the European Green Deal and, thereby, classified as sustainable. For industrial organizations, there is an urgent need to develop adaptive capabilities to meet the requirements set by the new taxonomy. The present scoping review contributes by analyzing academic publications on this topic through the lens of a complex science and systems approach. It analyzes academic publications on the EU taxonomy, related to industrial organizations and their development of socio-technical systems. At the initial stage, 526 scientific publications were retrieved from three web repositories (Scopus, World of Science, and Scholar). Only eight publications matched the selection criteria and constitute the data of this study. Results indicate that there is a lack of holistic perspectives and an unbalanced system response to the EU taxonomy. Adopting a systems approach can help industrial organizations navigate the intricate dynamics of a sustainable transition, striking a balance between adhering to the EU taxonomy and maintaining market competitiveness. The findings emphasize the importance of trans-disciplinary approaches and the need for agile and adaptive ways of learning inside industrial organizations.

This study addresses the current and future mandatory reporting on taxonomy alignment for companies within the EU, examining the practical applicability of criteria outlined in the Climate Delegated Act. Focusing on the electrical manufacturing industry through a case study, a five-step method was developed to assess the usability of the sector-specific criteria. The results highlight the need for enhanced usability across all criteria and offer key recommendations for policy development. Particularly, the substantial contribution criteria for climate change mitigation relating to the "manufacture of other low-carbon technologies" and "data-driven solutions for GHG emissions reductions" were found to be impaired by usability issues. These results emphasize the relevance of investigating the activities assessed in this study when policymakers revise the current criteria. Finally, the study highlights the necessity for future implementation of assessments to prevent usability issues and provide a holistic picture of the status quo of the current EU taxonomy criteria. [ABSTRACT FROM AUTHOR]

Following the Fukushima disaster, several European countries revisited their policies and decided to phase out nuclear energy production. More recently, however, the EU taxonomy proposed a classification system of environmentally sustainable economic activities and consequently reopened the debate regarding nuclear energy. This study analyses public comments about the inclusion or exclusion of nuclear energy as a response to climate change, in the conceptual frameworks of ecological modernization, sustainability and technological neutrality. The study highlights the challenge of shaping energy policies amid dynamic circumstances and diverse viewpoints. Proponents of nuclear energy emphasised its low‐carbon emissions and climate change mitigation potential, while opponents focused on issues of radioactive waste and environmental risks. The study reveals that sustainability emerges as a potential reconciling framework to match arguments to influence the EU's decision‐making, while it reflects the political primacy of this process. Finally, this research recommends improving feedback visibility and enhancing clear communication, and suggests further research directions to understand future EU nuclear energy policies. [ABSTRACT FROM AUTHOR]

The regulations on green investments and sustainable economic activities introduced by the European Union, which were immediately applied in response to the pandemic crisis in order to control recovery measures under the NextGenerationEU, introduced the concept "do no significant harm" (DNSH). Referring to the EU Taxonomy, it binds implementation of the PNRR and PDC interventions to a stringent control of actual sustainability. The technical and economic feasibility projects of the PINQuA quality of living programme for North Naples and the Litorale Domizio, developed for the third-party activity by the Federico II Department of Architecture are the focus of research aimed at achieving EU objectives of environmental sustainability. [ABSTRACT FROM AUTHOR]

In the fight against climate change, nuclear energy as a sustainable energy source has gained interest. The European Union’s taxonomy is a significant initiative because it defines at a European level which economic activities can be considered sustainable, and because it gave citizens, businesses, environmental organizations and research institutes the opportunity to provide feedback on certain parts of the taxonomy during two public feedback periods. The aim of our research is to explore how respondents argue about the sustainability of nuclear energy. Our research confirms that those arguing for the inclusion of nuclear energy in the taxonomy stress the low-carbon nature of nuclear energy production and focus on the economic dimension of sustainability. Contrastingly, those arguing for the exclusion of nuclear energy highlight the unsolved problem of radioactive waste disposal and the environmental dimension of sustainability. The social dimension of sustainability is neglected in the arguments justifying both positions. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

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.

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. Article in Lithuanian. Bankų žaliosios veiklos kriterijų vertinimo teorinis tyrimas Santrauka Esant neigiamiems klimato kaitos ir natūralios aplinkos pokyčiams, finansų sistema įpareigota kuo efektyviau keisti savo finansinius mechanizmus, kad padėtų ekonomikai transformuotis pagal žaliojo kurso koncepciją. ES (2021) išleista Taksonomija yra ekonominis klasifikatorius, kurį naudodami verslai gali transformuoti savo procesus, o bankai atrinkti žaliuosius projektus. Tvarumas ir kova su klimato kaita yra viena iš Lietuvos banko strateginių krypčių, tad siekiant geresnių rezultatų, tikslinga būtų derinti valstybės ir verslo investicijas. Ir nors verslo veiklos tvarumas tampa prioritetu, paskolas teikiantys komerciniai bankai dar neturi aiškių kriterijų ar vienos vertinimo sistemos, kaip atskirti iš tiesų aplinką tausojantį verslą. Lietuvoje bankų sektorius vadovaujasi ESG principais, ES Taksonomijos reglamentu bei kitais kriterijais, leidžiančiais nuspręsti, ar skatinti vieną ar kitą verslą, kuris potencialiai galėtų sukurti ne tik finansinę, bet ir papildomą, tvarią ekologišką grąžą. Pagal JT atsakingos bankininkystės principus jau yra aktyviai įsipareigojusių bankų, kurie prisideda prie JT tvaraus vystymosi tikslų ir Paryžiaus susitarimo siekiant integruoto tvarumo kaip natūralaus elemento, būtino ilgalaikėje perspektyvoje. Straipsnyje analizuojama aktuali žaliojo kurso tema bankų sektoriuje, naudojamas mokslinės literatūros sisteminimas ir lyginamoji analizė. Aptariama žaliųjų finansų samprata; bankų veiklos pokyčiai ir naujas žvilgsnis į kredituojamus verslus pagal žaliojo kurso standartą bei bankų transformacija per jų veiklos kriterijus. Reikšminiai žodžiai: žaliasis kursas, žaliasis vertinimas, bankų sektorius, žalieji produktai, ESG principai, ES Taksonomija.

The purpose of the European Green Deal and the regulation associated with the so-called EU Taxonomy for Sustainable Activities is to lead capital flows towards sustainable investments. According to the European Commission this is necessary to finance solutions for the immense challenges ahead, such as climate change, social inequality, and loss of biodiversity. However, academic research raises concerns that sustainable investments may earn lower risk-adjusted returns in the long run. The European Supervisory Authorities identify greenwashing risks and pronounce the limited ability of retail investors to make informed investment decisions. The aim of this perspective article is to provide suggestions for a regulation on relevant information on sustainable investments provided by financial service providers to retail investors. Therefore, the existing regulations are put in relation with recent research on investments considering ESG issues. To enable retail investors' self-determined decision-making, financial service providers such as banks, mutual funds, and financial advisors must provide easily accessible, clear, and easily understandable information regarding the ESG-conformity of the offered financial products. In addition, financial service providers must inform retail investors about some specific risks that can arise from a narrow focus on ESG assets such as under-diversification, an overweight of large stocks, and returns that can be lower than the market return.

Purpose: The fundamental objective of the study is to characterise the features that accompany ESG risk management processes in Polish companies financing green investments with a bank credit. Design approach: The study focuses on the observation of changes occurring in the concept and processes of ESG risk management following the so-called Paris Agreement of 2015. The EU regulations standardising the ESG risk management process in companies and banks have been analysed, indicating the differences resulting from them. The inclusion of ESG risks both in creditors and credit recipients is achieved through various channels, determining the extent, and expected outcomes of green investments. Without a doubt, the issue has been receiving considerable research attention in many papers since the energy crisis caused by Russia’s aggression against Ukraine. However, in light of EU regulatory changes and the increased interest of business entities in green financing, uncertainties, and research problems are on the rise in this area. An evident limitation of the conducted research is the lack of empirical data completing the knowledge on the effects of ESG strategies both domestically and in EU member states. Therefore, the paper draws on questionnaire surveys conducted by the authors, as well as on the findings of various reports published on the subject. Findings: The research shows that EU regulations increase the security of financing green investments in both companies and banks. The concept of sustainable development and ESG risk management associated with it have been severely curtailed through their introduction. Nevertheless, there is a fairly substantial area of uncertainty associated with the process of financing green investments. The study analyses its determinants indicating that internal ESG risk management procedures of companies and banks do not eliminate the external risks of financing corporate green investments. Originality/value: The conducted research undoubtedly broadens the knowledge about the role and significance of ESG risk in the green investment financing process. The analysis of studies relating to ESG risk, taking into consideration EU documents, contributed to exposing unexplained, debatable, and unsolvable issues. The questionnaire survey as well as the secondary data obtained made it possible to verify the number of common opinions and statements, along with the main hypothesis of the paper. [ABSTRACT FROM AUTHOR]

The article elaborates on the EU Green Bond Standard, a cornerstone of the Proposal for a Regulation on European green bonds that was put forward by the European Commission in July 2021. Within the analysis, three research questions are posed. First, the article deals with the question of whether the EU Green Bond Standard is really needed; particularly, whether there is a need for EU regulatory intervention on the EU green bond market. Second, it examines the method of regulation which was adopted for the EU Green Bond Standard. Specifically, does this standard differ and offer any added value compared to private standards for the issuance of green bonds? Finally, the article discusses the impact of the EU Green Bond Standard on the EU green bond market. Within this section, the questions of fragmentation and regulatory competition between public (EU) and private regimes are dealt with. The article ends with proposals for modifications of the EU Green Bond Standard. It has been suggested that the EU Green Bond Standard should have a mandatory character for all issuances of green bonds on the EU green bond market. Private standards should not be replaced by the EU Green Bond Standard but only reconciled with it. With regard to its content, the EU Green Bond Standard should constitute a mixture of public and private obligations; yet, some necessary regulatory space should be left for private standards. [ABSTRACT FROM AUTHOR]

The sustainable finance industry has boomed in the face of uncertainties ranging from its justification as a viable financial product to its impact in terms of sustainability outcomes. This article seeks to characterize the conditions of the present phase and to provide insights on its present direction of travel and how future progress might best occur through two lenses. First, it reviews elements of progress in sustainable finance over the past half-century as characterized by interactions between three primary factors. Second, it presents a study of recent green bond issuances that examines the strength of the connection between sustainable finance and sustainability objectives. Analysis suggests markets do not demand rigorous design standards or accountability and are focussed on product sector growth over sustainability outcomes. Classification of finance as sustainable often lacks appropriate validation from independent due diligence and verification, post-investment assessment of outcomes, and an oversight regime assuring information integrity. The notion that allocating capital to sustainability-labelled financial products contributes to desired outcomes may be an illusion that is distracting from, and so delaying, a more demanding approach to directionally positive capital allocation. Lessons for newer sustainability linked products are considered. Suggested reforms require firmer public governance oversight regulation if acts undertaken in the debt capital markets are to meaningfully contribute to urgent sustainability challenges. [ABSTRACT FROM AUTHOR]

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.

ABSTRACT: The sustainable development perspective, that left its mark on the 21st century, has significantly affected global economic policies and investment strategies. The linear economy approach, which left its mark on the process from the existence of capitalism to the 1970s, when environmental awareness increased, was completely interrupted by the economic contraction created by the Covid-19 process and left its place to circular economies. In this context, the European Green Deal published in 2019 is a circular economy roadmap that puts global environmental goals at the center of the economy and thus aims to increase the efficient use of resources. In the same year, the European Commission adopted the EU Taxonomy to integrate its financial system in line with its cyclical economic, social and environmental targets. EU Taxonomy aims to reveal environmentally compatible-incompatible activities in global financial markets with the rules it brings to EU financial market instruments. At the same time, Taxonomy aims to eliminate transaction costs, green laundering and information asymmetry caused by economic activities incompatible with sustainable cyclical activities. ÖZ: Yirmi birinci yüzyıla damgasını vuran sürdürülebilirlik, küresel ekonomi politikalarını ve yatırım stratejilerini önemli ölçüde etkilemiştir. Kapitalizmin var olduğu süreçten çevresel bilincin arttığı 1970’lere kadar olan sürece damgasını vuran doğrusal ekonomi yaklaşımı, Covid-19’un yarattığı ekonomik daralmayla tamamen sekteye uğramış, yerini döngüsel ekonomi yaklaşımına bırakmıştır. Bu bağlamda 2019 yılında yayınlanan Avrupa Yeşil Mutabakatı, küresel çevresel hedefleri ekonominin merkezine koyan ve böylece kaynakların verimli kullanımını artırmayı amaçlayan bir döngüsel ekonomi yol haritasıdır. Avrupa Birliği Komisyonu, aynı yıl döngüsel ekonomik, sosyal ve çevresel hedefleriyle uyumlu olarak finansal sistemini de entegre edecek şekilde AB Taksonomisini kabul etmiştir. AB Taksonomisi, AB finansal piyasa araçlarına getirdiği kurallarla küresel finansal piyasalarda çevreyle uyumlu/uyumsuz faaliyetleri ortaya çıkarmayı hedeflemektedir. Aynı zamanda Taksonomi, sürdürülebilir döngüsel faaliyetlerle uyumsuz ekonomik faaliyetlerin neden olduğu işlem maliyetlerini, yeşil aklamayı, bilgi asimetrisini gidermeyi amaçlamaktadır.

The European Union Taxonomy on Sustainable Finance is the first comprehensive classification designed to identify the extent to which an economic activity is environmentally sustainable. This paper investigates how the EU Taxonomy affected corporate investments for Taxonomy-eligible companies compared to non-eligible ones. We applied a difference-in-difference model using a dataset of 130,918 firms from 27 EU Member States, using 2019 as a threshold. Our findings show that the introduction of the EU Taxonomy per se did not result in an increase in corporate investments among Taxonomy-eligible companies; rather, firms’ size and Taxonomy-eligibility uncertainty played a key role in explaining variation in corporate investments. The implications are twofold: the participatory and communication approach of the European Commission implemented with the EU Taxonomy is effective in nudging corporate investments aimed at sustainability. However, this only happens when the regulation provides an unambiguous sector specification. Thus, it is important that the regulatory interventions clearly define what is sustainable.

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Purpose: The policy of green financing of companies, together with the energy crisis caused by Russia’s aggression against Ukraine, has returned as a significant research problem requiring a new opening strategy. The research analyzes the policy of green financing of companies from the perspective of the changing loan portfolio of banks. The fundamental objective of the research is to identify the scale of their involvement in green financing as well as an exegesis of the stimulants and destimulants accompanying the process during periods of financial and economic instability. Design approach: The paper uses the results of a questionnaire survey of the 10 largest commercial banks in Poland. The research was conducted in the second quarter of 2021, that is in the situation of a slow recovery of the EU countries from the coronavirus pandemic and a rising awareness of the urgent necessity to rebuild the European economy in which its new green deal was embedded. Findings: The con-ducted research shows that national banks have joined the green financing process by hedging their investment portfolio against ESG risk. However, their involvement in financing green in-vestments has been cautious and frequently divergent. Some of them quickly joined the process. In contrast, a significant part of them accepted green financing making it conditional upon rapid progress of sustainable economic development and transparency in green investment financing. Oryginality/value: The research undertaken in the study fairly clearly confirms the fact that there is a growing interest in the Polish banking sector to increase the share of green loans in the investment portfolio. Although the involvement of banks in financing green investments is cautious and frequently divergent, the confirmation of the European Commission’s action towards the implementation of the Fit for 55 package, in spite of the energy crisis, also makes it possible to positively assess the banks’ anticipation of more transparent terms and conditions for green financing. [ABSTRACT FROM AUTHOR]

Awareness of the systemic challenges posed by environmental and social issues has driven regulatory action undertaken at the EU level more strongly by far than in any other jurisdiction. Some pieces of regulation adopted under the umbrella of the so-called European Green Deal rely on institutional investors to drive a shift towards sustainable finance. But in spite of the growing practical relevance of active share ownership, including in its environmental and social dimensions, whether institutions are motivated, and are actually able, to effectively play such crucial a role remains controversial. Even assuming they were committed to not just cosmetically address environmental and social issues, still there are limitations to the reasonable reach of investor action in face of the scale of the challenges at stake. Limitations not only derive from the deficient incentives structure and the collective action issues that are typical of asset managers. They also depend on factors not in control of the asset manager, such as varying end-investor preferences and availability of better ESG data and information. The problem of divergent, and opaque, ESG ratings and indices couples with that of non-consistent frameworks for corporate sustainability disclosures, and the underlying differing concepts of materiality, making it hard for investors to resort to reliable yet essential information they need to properly perform sustainability assessments. Some skepticism concerning institutions' disposition to sustainability seems to be justified also where evidence referring to their actual voting behavior at investee firms is considered. [ABSTRACT FROM AUTHOR]

The EU Taxonomy stands in sharp contrast to the principles of a market economy. It requires regulatory knowledge that cannot be expected to exist and hampers rather than stimulates entrepreneurial initiatives for coping with socially relevant scarcities. For all objectives addressed with his approach, more efficient policy instruments exist that play with and not against market forces. Apart from allocative inefficiencies, the Taxonomy-approach opens the door for all kinds of particularistic maneuvers and hidden political agendas. The Taxonomy absorbs high-skilled labor that is in high demand elsewhere in the economy and creates a massive extra bureaucratic burden without any expectable benefit for the total economy. Given the fundamental flaws in the overall concept, policy makers should stop it rather sooner than later. [ABSTRACT FROM AUTHOR]