The top priority of the European Union’s financial services chief Mairead McGuiness (pictured) was on Monday (5 December) to say that making it easier for investors to use the ‘taxonomy,’ which allows them to classify sustainable investments and activities, is now a top priority.

The bloc is taking measures to ensure that the economy reaches net-zero emission targets by 2050. This includes disclosures by asset managers and companies. These disclosures are supported by a taxonomy.

McGuinness stated that the taxonomy is still a work in progress and she was aware company concerns about its “useability”. Next year, rules will need to be applied.

She told the European Parliament that she would publish more than 200 frequently asked questions in order to assist businesses with their reporting obligations under the taxonomy.

“The goal is to make taxonomy work efficiently. This issue of usability will be carefully examined.

She will also publish guidance in 2023 to clarify some points in the bloc’s sustainability related disclosures, or SFDR.

She said that “we may need to look at this regulation in a more comprehensive way.” She also stated that a public consultation would be held in 2023 in order to examine the role of the regulations in mitigating greenwashing and over-inflated sustainability claims.

Next year, technical details regarding the implementation of company sustainability disclosures in annual reporting, also known as CSRD, are being brought forward.

McGuinness said: “We have done a lot, now we have to make sure it all works together.”

McGuinness said that a phase-in approach rather than a big bang approach is more likely to add the remaining “taxo4” elements of the taxonomy, including water, circular economy and pollution prevention, to the taxonomy.

She said that it would begin with those sectors where there is already agreement, adding that the EU executive is considering a proposal to increase transparency and avoid conflicts at rating companies on environmental, social, and governance credentials.