Taxonomy Disclosure in the EU – A Useful Framework, Despite Current Challenges

Schütze Franziska () and Sandbaek Benedikte ()
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Schütze Franziska: Senior Researcher, 28354 German Institute for Economic Research , DIW Berlin, Germany
Sandbaek Benedikte: Doctoral Student at the Department of Banking, University of Tuebingen, Tübingen, Germany

The Economists' Voice, 2025, vol. 22, issue 1, 161-172

Abstract: The EU Taxonomy is a classification system for sustainable economic activities and a framework for various regulatory initiatives. Its primary objectives are to enhance transparency, to reduce greenwashing and ultimately to redirect capital toward more sustainable activities. However, since its introduction, market participants have raised concerns about whether the benefits justify the costs. This article examines current challenges, such as the initial implementation costs, data gaps, sector and counterparty coverage, while also highlighting opportunities like enhanced international competitiveness and improved ESG risk management. The focus of this article is on banks as both preparers and users of Taxonomy data, addressing issues related to Taxonomy eligibility, alignment, and the Green Asset Ratio (GAR). The article concludes with recommendations for policy makers and authorities to improve the effectiveness of the Taxonomy disclosure.

Keywords: EU taxonomy; ESG disclosure; regulatory uncertainty; banking regulation; ESG risk management; omnibus (search for similar items in EconPapers)
JEL-codes: G28 G32 Q58 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/ev-2025-0016

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