The EU Taxonomy is a classification system developed by the European Union to help guide investment toward sustainable economic activities. It defines criteria for determining whether an economic activity is environmentally sustainable based on its contribution to six environmental objectives:
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection of biodiversity and ecosystems
By providing a clear framework for assessing sustainability, the EU Taxonomy aims to direct capital toward green projects, reduce greenwashing, and support the transition to a low-carbon economy.