Understanding the EU Taxonomy

November 4, 2020

Investors will be required to pay attention to the EU Taxonomy, regardless of their own domicile, because the EU is setting up the framework that will drive a repricing of sustainable assets and result in an array of assets becoming stranded.

The Taxonomy is complex because it is very detailed and, as of today, incomplete. This creates investment opportunities for forward-leaning investors to anticipate where capital will flow under this framework. It puts the onus of responsibility on GPs to train their teams to identify investment opportunities that satisfy the requirements of the Taxonomy. GPs and asset owners alike will need to invest in data collection systems like never before.

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