Achieving Environmental Sustainability: Forestry management and the EU Taxonomy Regulation

The EU Taxonomy allows both financial and non-financial companies to adopt a shared definition of economically sustainable activities that are considered environmentally sustainable. It plays a crucial role in scaling up sustainable investments within the EU by providing security for investors, protecting them from greenwashing practices, assisting companies in becoming more climate-friendly, and mitigating market fragmentation.

The Taxonomy Regulation sets six climate and environmental objectives:

• Climate change mitigation
• Climate change adaptation
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystems.

To make a substantial contribution to each objective, different means may be required for an activity.

The EU Taxonomy Regulation aims to offer clarity and guidance on economic activities that can be classified as environmentally sustainable. This includes the forestry sector, which plays a crucial role in the European Union’s efforts to combat climate change, protect biodiversity, and achieve sustainable development.

Regarding forest management activities and forestry products, the EU Taxonomy provides specific criteria for determining their alignment with environmental sustainability objectives. These criteria take various factors into account, such as responsible forest management, conservation efforts, and the promotion of sustainable practices.

When assessing the EU Taxonomy alignment of forestry products, key aspects considered may include:

• Sustainable Forest Management: The use of forestry products derived from sustainably managed forests is promoted by the EU Taxonomy. This involves adhering to recognized certification schemes like the Forest Stewardship Council (FSC) or the Programme for the Endorsement of Forest Certification (PEFC). These certification schemes ensure responsible forest management practices, including biodiversity protection, deforestation prevention, and respect for the rights of indigenous peoples and local communities.
• Carbon Sequestration and Emissions: The role of forests in carbon sequestration and climate change mitigation is addressed by the EU Taxonomy. Forestry products originating from forests with effective carbon storage capacities and sustainable practices are more likely to align with the objectives of the taxonomy. Additionally, products with a low carbon footprint throughout their lifecycle, from harvesting to processing and distribution, are viewed favorably from a sustainability perspective.
• Biodiversity Protection: Protecting and promoting biodiversity is a significant component of the EU Taxonomy. Forestry products derived from forests that prioritize biodiversity conservation, including the preservation of natural habitats, protection of endangered species, and maintenance of ecosystem services, are more likely to meet the criteria set by the taxonomy.

It’s important to note that the EU Taxonomy also considers the minimum safeguards related to social aspects, such as compliance with human rights, labor rights, and health and safety standards in the forestry sector.

Aligning forestry products with the EU Taxonomy allows businesses and investors to showcase their steadfast dedication to environmental sustainability while facilitating the flow of sustainable finance. This helps to achieve the EU’s objectives of promoting a green and sustainable economy.

Contact BM Certification to discover more about our services and explore how we can assist you in navigating EU Taxonomy compliance. Together, let’s shape a greener and more sustainable future.