CIA Green Finance Position: Taxonomy

Not only has our sector improved operational environmental sustainability, e.g. 83% reduction of scope 1 GHG emissions between 1990 and 2019, but we also provide many of the solutions to unlock the sustainability transition. From more sustainable mobility enabled by advanced batteries and hydrogen fuel cells, to improved building energy efficiency enabled through insulation materials, the chemical sector plays a crucial role.

The UK Government published in 2019 a Green Finance Strategy, committing to greening the financial system, financing the green transition, and seizing the economic opportunity. During the transition period for the UK withdrawing from European Union membership, the European Union published legislation in June 2020 to establish a framework to facilitate sustainable investment. This is commonly referred to as the EU’s ‘Taxonomy’. To be considered sustainable under the EU Taxonomy, activities must meet the criteria for ‘substantial contribution’ to one of the six environmental objectives and at the same time must not breach any of the ‘do no significant harm’ criteria for the other five objectives. Compliance with minimum social guards, such as the International Bill of Human Rights, is also required. The UK has transposed the EU Taxonomy but not the Technical Screening Criteria, which provide the definitions of requirements that certain economic activities must meet in order to be considered sustainable.