Finsif tukee vuosittain vastuullisen sijoittamisen tutkimusta stipendein
Finsif jakaa stipendejä vastuullisesta sijoittamisesta kiinnostuneille opiskelijoille ja tutkijoille. Stipendien jaon tarkoituksena on edistää vastuullisen sijoittamisen tutkimustyötä. Stipendejä jaetaan vuosittain enintään 8000 euron summalla. Vuoden 2025 stipendihaku alkaa keväällä. Lisätietoa
One of the key aspirations of the European Parliament during its 2019–2024 term was to regulate the sustainability of the EU’s internal market. During this period, the European Commission proposed new legislative instruments and amended existing ones. The overarching theme behind these instruments was the objective of directing private capital toward more sustainable activities.
My thesis focused on examining the obligations of the EU Taxonomy from the perspective of a company falling within its scope. Companies in the forestry sector and economic activities related to climate change mitigation and adaptation were selected for analysis. Due to the chosen perspective, companies in the value chains were excluded from examination.
The thesis proceeded as follows: first, the EU Taxonomy and the relevant regulatory framework were analyzed; second, the compliance obligations of forestry sector companies were examined; third, the thesis explored how these obligations impacted financial market participants and their financial products. Finally, the effectiveness of the EU Taxonomy was assessed from various perspectives.
To summarise, the European Commission’s attempt to connect scientific literature on climate and the environment to the functioning of the internal market was identified. Transparency was found to be used to highlight unsustainable practices within the EU’s internal market, with the aim of channeling capital toward more sustainable destinations.
In practice, the EU Taxonomy appears to favor large companies whose operations are already sustainable, as opposed to those striving to achieve sustainability in their economic activities. In addition, it was found that to remain an effective legislative instrument, the technical screening criteria of the EU Taxonomy need to be updated frequently, and gradual pathways toward sustainability should be established for transitional and enabling activities.
The thesis concluded that it is justified to wait for full compliance of the EU Taxonomy’s obligations before proposing any significant legislative changes, as the information published under the EU Taxonomy is incomplete. This will avoid unnecessary costs while the implementation is still in progress. Once sufficient information on the practical effectiveness of the EU Taxonomy becomes available, its effectiveness can be improved by additional instruments or other regulatory technical measures.
It has been a while since I submitted my thesis, which provides an opportunity to reflect: what do I think about the thesis now, and has it helped in my professional life? To the latter, the short answer is yes. The topic of the thesis is timely and has caused a lot of headache in the business community.
The first question is more difficult to answer. In retrospect, I spent many hours on the EU legal background of the EU Taxonomy, even though the most interesting issues lie in its practical application. According to recent surveys, a significant number of large companies have had to change subcontractors or suppliers due to reporting obligations. Hence, it would appear that smaller companies in the value chains of large companies are increasingly exposed to information requests – those who can respond to information requests remain in the value chains, while others do not.
It remains to be seen whether a different regulatory strategy would have been more cost-effective in steering the internal market in a more sustainable direction. Currently, the costs seem high for both large and small companies, including those outside the explicit scope of sustainability reporting obligations.
The latest twist came in November 2024, when Ursula von der Leyen mentioned during an informal meeting in Budapest that a possible consolidation of the EU Taxonomy, CSRD, and CS3D under the so-called Omnibus initiative is being considered. It will be interesting to see where this development leads. The idea of consolidation is an interesting one, and there is certainly a case for it. However, it is worth bearing in mind that continuous amendments also have their negative implications. It would also be ideal to draft sustainable regulations rather than short-term regulations on sustainability.
I will continue to follow the EU’s pursuit of sustainability. Please get in touch if these topics interest you.
Kasper Sass
Doctoral Researcher in Law, University of Turku and a Master of Science student, Hanken School of Economics
The study can be found here.
