EU Taxonomy proposal: “Deep green” to substitute hazardous chemicals
The proposal for the final four criteria of the Taxonomy, the EU’s effort to channel funds into the transition towards sustainability, states that producing safer alternatives to harmful chemicals should be considered “deep green” – basically as green as it gets. This suggestion could be a big win for chemical safety, and a powerful weapon in the fight against hazardous substances.
Last year, two of the six environmental criteria in the Taxonomy – the ones concerning climate change mitigation and adaptation – came into force and became mandatory for companies to report on.
Now, the Platform on Sustainable Finance, an expert panel where ChemSec has actively participated, has published its proposal for the remaining four criteria standardising sustainability: on biodiversity, pollution protection, water, and circular economy.
What do the criteria say about chemicals?
There are several wins for chemical safety in the four new criteria. But the biggest one is undoubtedly the fact that companies producing safer substitutes to hazardous chemicals – or products that substitute products containing hazardous chemicals – should be considered “deep green”, and will be rewarded accordingly in their Taxonomy reporting.
The statement is included in the criteria report chapter on manufacturing chemicals and chemical products, the work on which was led by ChemSec’s representative on the expert panel.
The suggested Taxonomy criteria include more hazard classes than REACH’s list of substances of very high concern, which are restricted to CMRs (carcinogenic, mutagenic, or toxic for reproduction), PBTs (persistent, bioaccumulative, and toxic), and substances with equivalent properties.
“It looks like the Taxonomy is going to cover a wide variety of harmful substances, which is very good news indeed”
In addition to these classes, the proposal also includes EDCs (endocrine-disrupting chemicals), PMTs (persistent, mobile, and toxic), respiratory and skin sensitisers, STOTs (Specific Target Organ Toxicity), and suspected CMRs.
Hence, it looks like the Taxonomy is going to cover a wide variety of harmful substances, which is very good news indeed.
Why is this a big win for chemical safety?
By labelling substitution of hazardous chemicals as “deep green”, the EU is acknowledging the importance and urgency of research and development of safer chemicals and products. It’s essential that we phase out the bad stuff, which decision-makers on all levels and in all sectors are now finally beginning to understand.
If – and when – the Taxonomy criteria proposal is adopted, more (deep green) funds are going to start flowing into the production of safer alternatives to replace substances and products that add to global pollution. This will create a positive chain reaction:
- An incentive for the chemical industry to innovate,
- safer material choices for downstream users,
- safer products for end-consumers, and
- a healthier environment overall – for everyone.
How will this affect business and investments?
A company producing safer substitutes or products will receive credit for its “deep green” business when reporting on the Taxonomy. The company can then show off its emerald-shimmering portfolio to banks, loan lenders, and sustainable investors, as an argument for new or continued funding. The company can also share this information with other companies and private consumers to influence their purchase, investment, or partnership decisions.
As for investors, they can use the information from the Taxonomy reports to compare corporate peers and create investment tools to ensure participation in these “deep green” business activities, thereby granting their own portfolio that same lovely shade of jade.
What happens now?
Now that the Platform on Sustainable Finance has published its proposal for the remaining four criteria, it’s time for the EU Commission to write a delegated act, which has to pass the scrutiny of the European Council and Parliament. Then, the entire Taxonomy will come into force and companies can start reporting on it.
“The four criteria proposals published by the Platform on Sustainable Finance should be adopted as they are, without additions or distortions”
However, this next part of the process is more than a little nerve-wracking for the expert panel, considering the EU Commission’s late – and detrimental – additions to the two climate criteria published last year.
The climate criteria do indeed contain many truly sustainable aspects. However, they were largely overshadowed by the EU’s regrettable decision to include gas and nuclear energy, two sectors that have previously been viewed as anything but sustainable.
This must not happen again. It is ChemSec’s strong opinion that the four criteria proposals published by the Platform on Sustainable Finance should be adopted as they are, without additions or distortions.