The EU Taxonomy is a system for classifying economic activities based on their contribution to sustainability. It was developed to create uniform standards and ensure that investments and financing are in line with the EU's environmental goals. The taxonomy covers six environmental objectives: climate change mitigation, adaptation to climate change, sustainable use and protection of water and marine resources, transition to a circular economy, prevention and reduction of environmental pollution, as well as protection and restoration of biodiversity and ecosystems.
Software can represent the EU Taxonomy in various ways:
Classification of company activities: Software can help companies classify their activities and products according to the EU Taxonomy. This can be done through the use of algorithms that analyze a company's activities and align them with the taxonomy criteria.
Reporting and compliance: Software can be used to create reports that comply with the requirements of the EU Taxonomy. This includes collecting relevant data and metrics to quantify and document a company's contribution to environmental goals.
Portfolio analysis: For financial institutions and investors, it is important to understand how sustainable their portfolios are and whether they comply with the requirements of the EU Taxonomy. Software can be used to analyze and evaluate portfolios to determine their compatibility with the taxonomy's environmental goals.
Monitoring and evaluation: Software can continuously monitor whether companies and investments continue to meet the criteria of the EU Taxonomy. This can be done through the integration of real-time data and the application of algorithms to assess environmental impacts.
