In an own-initiative opinion adopted in September, the EESC has asked the Commission to describe the provisions required to extend the EU sustainability taxonomy to social objectives. The Commission is mandated by the Taxonomy Regulation to publish a related report, but has so far failed to do so.

"The EESC calls for a holistic EU taxonomy, which includes environmental as well as social sustainability. A social taxonomy would help to channel investment towards social goals", said rapporteur Judith Vorbach. "It should constitute a gold standard, reflecting a higher level of ambition than provided for in legislation".

The EU taxonomy is a classification system establishing a list of environmentally sustainable economic activities for scaling up sustainable investment in support of the European Green Deal.

The EESC is of the opinion that a social taxonomy would help tackle bogus claims by businesses that want to attract socially responsible investors by providing accurate information about their social footprint. The Committee believes that a smartly framed social taxonomy can go a long way towards avoiding so-called 'social washing'.

Kęstutis Kupšys, member of the study group, stressed that the financial industry was eager to discuss social taxonomy. "There is a demand for sustainable financial products in the market, including for social sustainability" he said. "Unless we get a clear classification on what is considered 'social', we will miss this aspect in the area of sustainable investments." (tk)