The green taxonomy, the EU list of sustainable economic activities, was introduced in 2021 to establish unambiguously what is and what is not a green investment. As financial institutions that have to report on the taxonomy, we welcome such a list. European investors will thus gain a better understanding of what sustainable investment is, which will drive the sustainable transition and combat greenwashing.

Last year, the member states and the European Parliament reached a good agreement on the general guidelines for the green taxonomy. The latest proposal presented by the European Commission was, however, a step in the wrong direction. The Commission classifies the use of natural gas and nuclear power as 'green transition techniques', thus putting the added value of the taxonomy at risk. It has evolved from a widely supported list to a controversial tool that actually encourages greenwashing.

Triodos Bank and several other financial institutions believe natural gas should not be included, because it does not comply with the EU climate law and does not make a substantial contribution to reducing CO2 emissions. Nuclear power, because it is not in line with the so-called 'do no significant harm' principle, which states that an activity must not have a negative effect on other environmental goals. The lack of a guaranteed and definitive solution for the disposal of nuclear waste is contrary to that principle.

The final vote of the European Parliament on the European taxonomy will be in July.