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EU Taxonomy

EU-Specific

EU framework defining which economic activities are environmentally sustainable for investment and reporting purposes.

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Sources

  1. EUR-Lex — Regulation (EU) 2020/852 (EU Taxonomy) eur-lex.europa.eu accessed 22 September 2026

Regulation (EU) 2020/852 “establishes the criteria for determining whether an economic activity qualifies as environmentally sustainable for the purposes of establishing the degree to which an investment is environmentally sustainable.” Article 9 sets six environmental objectives: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; and the protection and restoration of biodiversity and ecosystems. The Taxonomy classifies activities, not companies or products.

Quoted from the act itself on EUR-Lex. How it applies to exporters, above, is this lexicon’s summary.

Common questions

What is the EU Taxonomy and does it affect Indian companies?

EU Taxonomy is a classification system determining which economic activities are environmentally sustainable. Directly affects Indian companies: (1) EU investors subject to Taxonomy must report what % of investments are Taxonomy-aligned — affecting FDI into Indian companies, (2) EU companies in supply chains must report Taxonomy-aligned revenues — Indian suppliers must provide relevant data, (3) Indian renewable energy companies seeking EU green financing must demonstrate Taxonomy alignment. Most relevant to: green energy, infrastructure, manufacturing, transport sectors.

Related terms

From the AJG lexicon archive (July 2026).

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