The goal of the EU taxonomy is to channel investments towards sustainability by providing a transparent classification system for investors and companies. Currently, the EU Taxonomy Regulation and its implementing acts focus on climate-related and environmental goals, complemented by minimum social safeguards. While the EESC welcomes the green goals, it calls for a concept of holistic sustainability, so that the taxonomy includes environmental, as well as social sustainability.

The minimum social safeguards are useful, but not enough to ensure social sustainability for workers, consumers and communities. The planned social taxonomy will gain importance if it is part of an overall policy geared towards social sustainability, which also implies the financing of social welfare by government spending, and the importance of public investment.

The EESC calls on the Commission to publish the overdue report describing the provisions that would be required to extend the taxonomy's scope to "other sustainability objectives, such as social objectives", as requested in the Taxonomy Regulation. The EESC points to the comprehensive preparatory work done by the Platform on Sustainable Finance, and recommends adhering to the proposed objectives of decent work, adequate living standards and inclusive communities reflected in a multilevel approach. Also, the upcoming Corporate Sustainability Reporting Directive would be a complement to a social taxonomy against which the activities could be evaluated. The EESC recommends starting with simple criteria and providing for easy and transparent procedures. The close integration of the social and green taxonomies should be a goal, but as a first step, mutual minimum safeguards might be practical.

The rising demand for socially orientated investment should be supported by providing a reliable taxonomy which makes companies who contribute to social sustainability more visible. A well-designed social taxonomy would contribute significantly to tackling the problem of social washing, where an organisation makes misleading claims about the social responsibility of its products or services. It should constitute a gold standard, reflecting a higher level of ambition than provided for in legislation. In particular, it should refer to the European Pillar of Social Rights and the Sustainable Development Goals, such as SDG 8 on decent work. The social partners and civil society organisations should be fully involved when designing the taxonomy and complaint mechanisms should also be provided for them. As with the green taxonomy, the definition of what should be included in a social taxonomy will be controversial. But this is exactly why the definition process should be subject to democratic decision-making. The success of the taxonomy is linked to its credibility, and the activities it includes must meet a widely accepted definition of sustainability.