The EU Taxonomy is a system that classifies economic activities based on their contribution to the EU’s climate and environmental objectives. This classification helps investors and companies identify green, or environmentally sustainable, activities that meet certain criteria without significantly harming any of the EU’s objectives and while adhering to minimum social safeguards. The EU Taxonomy is an important tool that translates climate and environmental objectives into clear criteria, providing a common language for green activities.

The EU Taxonomy can create a frame of reference for investors and companies and support their efforts to plan and finance their transition to sustainability. It can also mitigate market fragmentation, protect against greenwashing, and accelerate financing for sustainable projects. As part of a broader sustainable finance framework, the EU Taxonomy can help scale up investment in green projects necessary to implement the European Green Deal.

The reduction of GHG emissions from buildings is a key focus of the EU’s climate and development actions, with recent initiatives such as the Renovation Wave Initiative and the ‘Fit for 55’ package proposing legislation to strengthen emissions regulations for buildings. While improvements in building insulation and heating/cooling systems can reduce emissions from fossil fuels use, alternative heating systems like heat pumps may increase electricity demand, leading to higher emissions from the electricity sector unless this demand is met by renewable or decarbonized energy.

From 2005 to 2019, the EU buildings sector saw a 29% decrease in total GHG emissions. This trend has been driven primarily by the EU’s decarbonization strategy, which promotes end-user electrification in the residential sector, coupled with the decarbonization of the electricity sector and improvements in energy efficiency in buildings, as well as warmer winter temperatures.

The Green Homes certification is taxonomy aligned. For details click here.