On 22 June 2020, Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (the Taxonomy Regulation) was published in the Official Journal of the European Union. It contributes to the legal framework aimed at ensuring better protection of the environment. The Taxonomy Regulation is an integral part of the EU strategy to attain the environmental objectives, which will be central to all major policies in the years to come.

The immediate objective of the Regulation is to set uniform criteria for classification of investments as “sustainable”. However, the Taxonomy Regulation has much wider application within the EU policies than what its subject-matter and scope would suggest. It sets out the EU environmental priorities, as well as the fundamental principles underlying the process of implementing them, while there is no obstacle for the criteria relating to the sustainability of investment to be used also for purposes of mechanisms beyond the disclosure obligations of certain groups of persons pursuant to the Regulation. Certain acts adopted after 22 June 2020 have already referred to the standards laid down in the Taxonomy Regulation, which implies that its significance could only increase in future.

It should be noted that the criteria, being set out in a regulation, have direct horizontal effect and apply to all persons within the EU and prevail over the national legislation of Member States. The Regulation entered into force on the twentieth day following that of its publication in the Official Journal of the EU, i.e. on 12 July 2020 but, for the time being, it is binding only on the authorities of the EU and the Member States.

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