In our ‘Sustainability Chat’, we talk to frontrunners in the sustainability field and pick their brain on experiences in working with sustainability, personal views and their best tricks of the trade.
We had the opportunity to chat with Marie Baumgarts, Chief of Regulatory Affairs and Sustainability Office at SEB, and a member of the Technical Expert Group (TEG) who set the foundation for the EU Taxonomy. Marie has over 20 years of experience of working with Sustainability, in various forms, and she is a specialist in the NFRD. Clearly, this was a golden chance for us to dig deeper into the EU Taxonomy and the EUs efforts to shift to a sustainable economy.
- Mainly, I’m greatly thankful for the opportunity. Although it was almost like having two full time jobs, both the group and the tasks were amazing. I’m very impressed by FISMA’s capacity and intentions. The TEG was mandated with four tasks where one was to recommend climate-related KPI:s, and to do so we had to research every best practice available in the market and create criterias that would suit all types of industries. The most difficult part was that we were meant to come up with the recommended KPI:s, on Taxonomy disclosures for the NFRD’s Non-binding guidelines, before TEG had done the report that would become the Taxonomy.
- Before the TEG was created, there was a High Level Expert Group whose task was to create an action plan to reach the SDGs, and the first action on that action plan was to create a Taxonomy to define what an environmentally sustainable activity is. This is the first time ever we have that defined. The EU Taxonomy basically translates the Paris Agreement into more granular thresholds. With the thresholds, the greenness of economic activities can better be translated into financial numbers, and become easier to relate to. What does 2 degrees celsius say for a market, company, division or product, really? The Taxonomy breaks down the SDGs to micro level and shows our performance in percentage. It enables us to compare businesses and their efforts as we now can put a “price” on the environment, something we didn’t even reflect on before in this way.
- There are other regulations that come into force in an effort to reorient capital toward sustainable activities, shifting the EU toward a sustainable economy, and I hope the market will enable this shift and be a part of solving the climate crisis. The market will need to weigh in ESG risks in their decision making processes, and think of the long-term impact of an investment.
- I believe that some of the companies not required to report will do so voluntarily anyway, since they will be within reporting companies’ supply- and value chains. Hence the reporting company will likely need information for SMEs and by reporting it could be a good way for SMEs to differentiate themselves. It will also push the rest of the market to report as the Taxonomy will hopefully become a measurement of comparison. This will, of course, increase the demand for good reporting softwares that can automate the collection of data, since doing it manually can mean a lot of work.
- You can say that the Taxonomy is similar to a dictionary; if you read the dictionary from A to Z, then yes, it will be overwhelming. However, if you only look up one word or the section of words you’re interested in, then it will make sense. Therefore, you need to know what industry you’re in, and then dive into the annex that shows what codes apply to your industry. And along that way you go.
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