The Taxonomy is part of the regulation of the financial market. It does not oblige the operators to change their activities to meet the criteria or, as such, impose restrictions concerning any sector. However, the Taxonomy can be utilised as a strategic tool to identify and verify practices that are environmentally sustainable.
For certain operators the regulation concerning the Taxonomy imposes mandatory reporting obligations. Large companies and financial market actors are already obliged to assess the eligibility of their economic activities in terms of the Taxonomy and report on this. From 2023 the reporting obligation was extended to alignment with the Taxonomy, i.e. whether the activities meet the technical screening criteria.
The Corporate Sustainability Reporting Directive (CSRD) that will be applicable from 2024 will expand the reporting obligation in stages.
The Taxonomy also concerns the EU Member States when the countries are laying down standards for green investment products within their own regulatory frameworks.