Following last month’s blog post and referring to taxonomy, it is important to highlight the value of enforceability. For the economic activity to be eligible under the taxonomy, several sectors are defined in the Delegated Acts on Climate Change Mitigation and Adaptation published on 4 June 2021.
The documents are structured according to the new thirteen macro sectors set out:
- Climate Change Mitigation
- Climate Change Adaptation
Each macro sector is divided into economic activities based on the NACE codes, constituting the European standard for classifying economic and productive activities, included in Regulation (EC) No 1893/2006. In this sense, the Delegated Act is the manual that specifies the technical requirements that activities must meet to be considered aligned with the Taxonomy.
The final report on the functioning of the Social Minimum Safeguards has been published this month. These are set out in the Taxonomies Regulation and ensure that companies undertaking investments or activities labelled “aligned” meet specific human and labour rights standards, bribery, taxation and fair competition.
- The company needs to establish an adequate HRD process for HR.
- There are indications that the company has not adequately applied HR and/or has abused HR.
- The company does not have anti-corruption processes in place.
- The company or its senior management, including its subsidiaries, have been definitively convicted in court for corruption.
- The company does not consider governance and tax compliance as essential oversight elements, and there are no adequate tax risk management strategies and processes.
- The company or its subsidiaries have finally been convicted of violating tax laws.
- The company must promote employee awareness of complying with all applicable competition laws and regulations.
- The company or its senior management, including its subsidiaries, have been finally convicted of violating competition laws.