Making our economy and our businesses more sustainable, including by promoting sustainable investments, is one of the big challenges of our time. In order to achieve this, financial markets and their actors need uniform language and rules to describe how an industrial or commercial activity has a positive impact on the environment and the fight against global warming ("environmental sustainability").
The European legislator has adopted a taxonomy and measures which will only be applicable as from 1 January 2022 (Taxonomy Regulation), but which require thorough preparation and reflection well before that. And beware: these rules are likely also to have an impact on your business!
The regulation encourages businesses to quantify their impact on the environment and to establish internal policies to manage and report on this impact. This potentially concerns all businesses that rely on external financing or insurance products or that offer their services to entities subject to the obligation to publish a "sustainability" statement. Its impact is therefore not limited to listed companies or financial institutions.
Entities required to publish a statement relating to their "sustainability" (non-financial statement) are invited to explain (1) how the products they offer to their customers (loans, insurance) contribute to this "sustainable development" because they are used to develop sustainable needs (and not to finance polluting activities, for example), and (2) how their suppliers and their suppliers' suppliers have an activity that complies with generally accepted social and environmental rules ("supply chain due diligence").
Whatever the size of your business, you are therefore well advised, as of today and even with very modest means, to identify its ecological footprint. To do so and until technical screening criteria have been adopted at European level, you can use existing tools to calculate, for example, the daily CO2 emissions of your car fleet. By having a set of data at your disposal and monitoring progress, your business will be ready to answer any questions your banker or insurer may have about the "sustainable" nature of its customers.
Although the regulation is currently limited to environmental issues and the fight against global warming, even before the regulation there were questions about the compliance of businesses with the principles of "diversity" and "equal treatment". The EU has announced that it will also develop a taxonomy in this area ("social sustainability").