It is a comprehensive approach to maximising the impact of your taxonomy activities and ensuring that the most beneficial eu taxonomy eligible and aligned projects are chosen, evaluated and implemented.
Taxonomy, also known as environmental taxonomy, is an EU-wide voluntary classification system that helps organisations to identify which economic activities have a substantial contribution to one or more of six environmental objectives. The objective of Taxonomy is to make financial markets work better by enabling investors to select investments with a real positive environmental impact. It also provides companies with incentives to invest in sustainable practices and eu taxonomy eligible and aligned technologies.
The six environmental objectives outlined by Taxonomy are climate change mitigation; climate change adaptation; sustainable use and protection of water resources; transition to circular economy; pollution prevention and control; protection of healthy ecosystems. In order for an activity or product/service related financial investment to be classified as taxonomy-eligible it must make a substantial contribution (at least 10% over 5 years) towards one or more of these eu taxonomy eligible and aligned objectives.
However, aligning an activity goes beyond being eligible for Taxonomy. Aligning activities requires taking into account all aspects associated with the project: its direct impacts on the environment, its potential indirect impacts on other related industries/activities, how it fits into the company’s overall sustainability goals, etc… It involves assessing each project from multiple angles before making any eu taxonomy eligible and aligned decisions about whether or not it should be invested in financially. Additionally, alignment must consider not only short-term effects but long-term ones as well – if we want our investments today to yield real positive outcomes tomorrow they will need consistent monitoring during their entire lifecycle in order for them not just remain compliant but find ways in which they can continually improve over time too!
To ensure successful alignment companies should look at their current projects through three lenses: Impact Evaluation & Measurement Analysis (IEMA), Stakeholder Engagement & Consultation (SEC) and Strategic ESG Integration (SEI). IEMA looks at each project’s direct impacts on specific environmental objectives – what results will this produce? What kind of emissions reductions could be achieved? How much water could be saved? SEC allows companies to identify who is affected by their decisions – what stakeholders need consideration when evaluating potential investments? Are there any local stakeholders who may benefit from this investment differently than those further away? Finally SEI helps businesses build out longer term strategies around ESG goals – how does this fit into our overall sustainability strategy? What other eu taxonomy eligible and aligned initiatives can we implement alongside this one so that our efforts compound rather than cancel each other out?
These three evaluation criteria provide valuable insights when selecting projects for investment based on Taxonomic compliance but they don’t necessarily guarantee success either - there are still many factors outside simply complying with Taxonomic guidelines such as legal considerations, economic stability etc… That said however they do provide strong foundations upon which successful alignment can be built upon provided that all aspects have been thoroughly considered prior making any decisions!
To maximise your impact you should ensure that you have taken all relevant considerations into account when planning new projects: assess both short term benefits versus longer term repercussions, weigh up any possible stakeholder conflicts, carry out thorough analysis using IEMA SEC & SEI frameworks etc… Doing so will help you choose wisely when investing while simultaneously helping you avoid costly mistakes down the line due unforeseen challenges! Additionally engaging external eu taxonomy eligible and aligned parties such as consultants may prove useful here too - gathering input from multiple perspectives increases chances of finding solutions tailored specifically towards your business needs rather than relying solely upon general guidelines set forth by third party organisations like EU's Taxonomic classification system!
Ultimately though no matter how many steps taken towards maximising your impact it comes down individual organisation’s responsibility when selecting suitable projects - whilst eligibility provides assurance organisations ultimately bear burden proofing their own eu taxonomy eligible and aligned selections before committing themselves financially so take extra care here & do plenty research first lest ye suffer later regrets.