EU classification system that uses precise technical criteria to define which economic activities may be labeled environmentally sustainable.
The EU Taxonomy for sustainable activities is a classification system established under EU Regulation 2020/852, which uses precise technical criteria to define the conditions under which an economic activity can be labeled environmentally sustainable, assessing its contribution to six environmental objectives and the absence of significant harm to the others. Unlike an ESG rating produced by a private agency under a proprietary methodology, the Taxonomy is a single, legally binding regulatory text built on sector-specific technical thresholds, which reduces subjectivity but demands considerable analytical granularity, activity by activity within a single company rather than one overall score. For insurers, the Taxonomy serves a dual purpose: it governs how they must classify their own investments and underwritten premiums as aligned or not, published each year as a percentage, and it offers a common vocabulary with insured companies to discuss the real sustainability of their activities, rather than an unverifiable statement of intent. Implementation complexity and the absence of coverage for many sectors remain the most common criticisms leveled at the tool.
Since 2022, major European insurers have published each year the percentage of their underwritten premiums and investments aligned with the green Taxonomy, a figure still low for most, revealing the gap between existing portfolios and the regulation's technical criteria.
EU Taxonomy, taxonomie UE, règlement taxonomie