To access this article please sign-in below or register for a free one-month trial. There are also fears of complex information requirements and costly audit procedures. I think its a risky strategy to focus on one for now and then potentially years later, when harm is already done, thinking about how we respond. But lack of clear definitions makes it difficult to evaluate social investments and resources and thus steer them toward socially-responsible activities and enterprises. Three main objectives. Discover the new FEPS Primers series. All material subject to strictly enforced copyright laws. But some say that social objectives are an essential underpinning of the green taxonomy. As detailed in our Taxonomy FAQ, a . Some progress had already been made on the social taxonomy. Reflecting on the criticism received in the consultation period last year, the European Platform on Sustainable Finance (the Platform) on Monday released its report that aims to inform the EUs policy decisions regarding a Social Taxonomy. Sustainability themes only start getting market attention when theyre financially material, and regulations like supply chain due diligence will make them financially material, he tells Capital Monitor. The CSRD, which also takes social issues and corporate governance into account, would be an important counterpart to the social taxonomy by ensuring the availability of essential data. Furthermore, much of the data required will consist of traditional economic indicators readily available to corporations, such as wage levels and the cost of goods and accidents. Inclusive and sustainable communities and societies, Access to basic economic infrastructure, inclusion of people with disabilities. Its not that Ive given up on this [EC] entirely, but its clear were not going to get any significant new proposals the energy is a bit lacking, Van der Heide says. In this context, the Platform for Sustainable Finance (Platform) has already presented a concept.The Platform proposes a similar structure for the social taxonomy as for the environmental taxonomy. The subsequent primers, by Arancha Gonzlez Laya, on trade, and Stephen Minas, on climate, will be ready very soon. This paper explores some of the many dimensions of old-age poverty and considers the possibility of addressing at least some of them by means of a guaranteed minimum income for retired persons, including one that could be introduced or co-ordinated at EU level. Assessments of its potential impact range from negligible, as investment decisions would be based primarily on motives such as increasing returns or minimising risks, to concrete fears that non-compliance with the taxonomy would lead to worse financing conditions. Reflecting on the criticism received in the consultation period last year, the European Platform on Sustainable Finance ("the Platform") on Monday released its report that aims to inform the EU's policy decisions regarding . How can the EU achieve a fair distribution of the tax burden? Susanne Wixforth is deputy head of the Economic Policy Department in the Vienna Chamber of Labour. Social Taxonomy and extended Environmental Taxonomy - EUROSIF This is because there is a great deal of confusion in the ESG criteria and measured deviations are particularly pronounced in the human-rights and product-safety categories. In its view, it is necessary to adopt a holistic approach to EU taxonomy, with both environmentally and socially sustainable aspects. Navin Rauniar on LinkedIn: Social taxonomy postponed due to . The EU and Gender Equality, by Agns Hubert, explores the progress and hurdles in the fight for equality between women and men at the EU level. This is important to address concerns about market foreclosure. Maria van der Heide, head of EU policy at ShareAction, a financial charity that promotes responsible investment, takes a similar view. Eurofounds new publication Recovery from COVID-19: The Changing Structure of Employment in the EU shows that European labour markets recovered strongly from the pandemic, before the onset of the disruptions from Russia's invasion of the Ukraine and related cost-of-living increases. News late last month that the European Commission (EC) had shelved its plans for a social taxonomy disappointed market participants but came as no huge surprise, in light of other developments, most notably the Ukraine war and its fallout. Her comments align with the concept of a just transition: the idea that all should benefit from the shift to a low-carbon world and no one should be left behind economically. She suspects the move may be more to do with the timing of the current EC, which has just over two years of its five-year term left to run. Nordea's Sustainable Finance Advisory team helps clients navigate fundamental changes in the financial markets as the global economy shifts towards becoming sustainable and low-carbon. That said - we acknowledge the complexity involved in developing a list. Thank you very much for your support! Thank you for subscribing to Capital Monitor. I think theyll keep saying they need more time, or theyll commission another study. The move has left investors, NGOs and others divided over whether other regulatory initiatives focused on ensuring social equality amid the low-carbon transition will be sufficient. Respect for human and workers rights should be a prerequisite. Towards social sustainability: a social taxonomy, A noble award for a popular misconception, A European initiative for a global green deal, Putting politics back in charge of the economy, Global environmental governance: reform urgent. All non-financial corporates need to report the proportion of their company primary KPIs (turnover, Capex, Opex) that are Taxonomy-aligned. Yet social sustainability is not even in its infancy. inclusive and sustainable communities in relation to affected groups, with sub-goals such as equity, inclusive growth and sustainable livelihoods. decent work in relation to employees in the company and along the value chain, with sub-goals such as strengthening social dialogue and promoting collective bargaining; decent living standards in relation to consumers, with sub-targets such as product safety, quality healthcare and housing, and. Governance topics such as tax transparency, anti-corruption and whistleblowing should be seen as a hygiene factor and as such constitute the minimum safeguards, which are often governed by existing laws under national or EU jurisdiction. The one-sided focus in sustainable finance on the environment also risks neglecting social-sustainability aspects of investments. Indeed while the basic principles underpinning the green taxonomy were science-based, the concepts the social taxonomy hoped to tackle such as human rights, living standards and tax transparency are far more subjective. One subject that has not been refreshed is the European Union #Social I hope you are all well refreshed after the sunny summer. The Progressive Potential of the EU, by Richard Corbett, takes a comprehensive look at the history of the EU, its decision-making structures and the areas worthy of reform. Social Europe is an independent publisher and we believe in freely available content. The 2 drafts reports are important steps in the Platform's deliverables to advise the Commission on potential extensions of the taxonomy framework beyond environmentally sustainable activities, to cover social objectives and activities that are significantly harmful to environmental sustainability, and those that have no significant impact on it. https://socialeurope.eu/author/judith-vorbach, https://socialeurope.eu/author/susanne-wixforth. "To avoid blue-washing (social-washing), we need a social taxonomy just as . The report was finally released in February 2022 and will serve to promote sustainable investment in Europe, putting the focus on the protection of human rights and on the social impact on the main stakeholder . The need is urgent and cannot be postponed. As with the environmental taxonomy, the do no significant harm principle should apply, in addition to minimum protection, so that none of the three main objectives is significantly impaired by a corporate activity. Towards social sustainability: a social taxonomy A vertical dimension would be useful to identify economic activities making a substantial contribution to social objectives. We suggest they start, for example, by beginning to understand their potential contributions to objectives and sub-objectives, and how these may be communicated via current or proposed voluntary sustainability reporting. Finally, transparency is crucial to the efficiency of the capital market. Adequate living standards and wellbeing for end-users, Healthcare, social housing, long-term care, education, 3. We have to make sure were not creating a social crisis by trying to fix the climate crisis. Sectors where standards for basic human needs and basic economic infrastructure are not met or accessible. However, if the social taxonomy has been ditched or at least postponed in Europe, one wonders what hope there can be for such a concept in the US, with its stark political polarisation and current ESG backlash, or Asia, arguably the most politically and economically diverse region of all. The publication of reports exploring how the EU could extend its sustainability taxonomy to cover 'transition' activities, and a separate document studying a potential taxonomy of social activities, has been postponed until 2022. COP 27 leaders call for new era of implementation, EU Digital Markets Act needs to align with existing antitrust rules, Compliance teams adapt to greenwashing challenges, Private markets should get on with tackling ESG. These could however be countered by taking advantage of the overlap with other reporting requirements, such as under the future Corporate Sustainability Reporting Directive (CSRD) and the planned Corporate Due Diligence Directive on sustainability. Social Taxonomy postponed due to unresolved conflict - GlobalCapital This opens the door to social- and greenwashing, so that negative impacts of economic activities are concealed and glossed over. We are starting to live in a different world all politicians now care about is inflation, energy and keeping the lights on, says the trade association member. News over the weekend that Russia had extended the shutdown of the Nord Stream pipeline saw the euro plunge to its lowest point against the dollar in 20 years the two currencies were standing roughly at parity as of 8 September. Its more difficult [to prioritise sustainability-focused regulation], but we can still work on other issues were still doing budgets for example., I think the [EC] doesnt have the appetite or the guts to move forward with this, she adds. 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