Governance topics such as tax transparency, anti-corruption and whistleblowing should be seen as a hygiene factor and as such constitute the minimum safeguards, which are often governed by existing laws under national or EU jurisdiction. This paper explores some of the many dimensions of old-age poverty and considers the possibility of addressing at least some of them by means of a guaranteed minimum income for retired persons, including one that could be introduced or co-ordinated at EU level. Sirpa Pietikinen, a Finnish politician and MEP for the centre-right European Peoples Party, tells Capital Monitor. From the EESCs point of view, a successful social taxonomy would support the increasing demand for socially-oriented investments by offering a coherent concept for measuring social sustainability. Stay tuned! The Social Taxonomy proposal has been aligned with existing and upcoming standards to the highest degree possible. Capital Monitor is hosting the second part of its Webinar series, Making Sense of Net Zero, alongside New Statesman and Tech Monitor on September 21. A social taxonomy would promote fair competition and make companies and organisations which contribute to social sustainability more visible. Three main objectives would address the key stakeholders of a company, complemented by sub-objectives: Sustainable management objectives, such as transparent and non-aggressive tax planning, should also be incorporated into the social taxonomy. If companies dont fulfil their obligations under it, they will have difficulties accessing European markets.. As opposed to the Environmental Taxonomy, which rests on validated research results and international frameworks such as the Paris Agreement, the Social Taxonomy builds on international consensus documents which can be classified into three groups:i) International Conventions,ii) the European Pillar of Social Rightsandiii) the UN Sustainable Development Goals. With many EU countries still heavily reliant on Russian natural gas, the war and subsequent western sanctions on Russia have sparked an energy crisis that has sent gas prices to record levels (see chart below). As with the environmental taxonomy, the do no significant harm principle should apply, in addition to minimum protection, so that none of the three main objectives is significantly impaired by a corporate activity. The Progressive Potential of the EU, by Richard Corbett, takes a comprehensive look at the history of the EU, its decision-making structures and the areas worthy of reform. The content you are trying to view is exclusive to our subscribers. Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription. She suspects the move may be more to do with the timing of the current EC, which has just over two years of its five-year term left to run. Elizabeth Meager is the policy editor of Capital Monitor. Some progress had already been made on the social taxonomy. The EU platform on sustainable finance, an expert group advising the EC on taxonomies and related policy projects, produced its final report on the framework in February, and the EC still owes the platform a formal response. inclusive and sustainable communities in relation to affected groups, with sub-goals such as equity, inclusive growth and sustainable livelihoods. The publication of reports exploring how the EU could extend its sustainability taxonomy to cover 'transition' activities, and a separate document studying a potential taxonomy of social activities, has been postponed until 2022. Reflecting on the criticism received in the consultation period last year, the European Platform on Sustainable Finance (the Platform) on Monday released its report that aims to inform the EUs policy decisions regarding a Social Taxonomy. The EC says the continent has also seen its worst drought in 500 years over the summer, hitting already under-pressure supply chains as key transport routes literally dry up, and inflation is soaring. Three main objectives. Transition, social taxonomy reports delayed to 2022. Conversely, the taxonomy would offer an assessment and classification of these data on the criterion of social sustainability. The European Commission technical expert group on sustainable finance presented the first draft of social taxonomy in July 2021, and the second version was expected by the end of 2021. She was previously managing editor of IFLR. use policy, Commentary and insight from leading industry specialists, Discounts for Environmental Finance events. The publication of reports exploring how the EU could extend its sustainability taxonomy to cover 'transition' activities, and a separate document studying a potential taxonomy of social activities, has been postponed until 2022. Sectors where standards for basic human needs and basic economic infrastructure are not met or accessible. Designed with an educational purpose, they represent a prominent tool in the new FEPS training strategy. The ECs plan had been to complement the existing green taxonomy with a classification tool for economic activities that contribute to the EUs social goals, such as improved living standards, decent wages, and tackling bribery and corruption. EU member states are seriously debating their next steps, after the EC has asked them to cut gas consumption. Its a question of willingness.. News over the weekend that Russia had extended the shutdown of the Nord Stream pipeline saw the euro plunge to its lowest point against the dollar in 20 years the two currencies were standing roughly at parity as of 8 September. But some say that social objectives are an essential underpinning of the green taxonomy. A substantial contribution to social sustainability should be deemed to exist if the positive effects associated with the activity are enhancedin housing, health, transport or telecommunications, for instance, all prerequisites for an adequate standard of living. The recent publication of a draft Social Taxonomy signals that the European Commission is expanding its scope beyond environmental factors. First of all, especially in the Nordic countries, minimum social safeguards such as tax transparency are deeply anchored in legal texts, and workers rights are especially protected relative to the global context. The Social Taxonomy is a next step in defining a label for activities that contribute to and advance social welfare. politics, economy and employment & labour, Judith Vorbach and Susanne Wixforth 4th October 2022. The EU's Platform on Sustainable Finance published a set of proposals for the social taxonomy in February 2022, after a four-month delay from the . If anything, these two frameworks are more directly effective than even if not as broad as a taxonomy because they create a legal liability for companies and can influence behaviour, argues Eric Christian Pedersen, head of responsible investment at Nordea Asset Management. In response to questions about the status of the social taxonomy, a spokeswoman said the EC would publish a report on the merits of extending the taxonomy to cover social issues in due course, and in the meantime would continue pursuing other policy initiatives that promote investments with a positive social impact. We should integrate social factors right from the start.. For this model to be sustainable, however, we depend on the solidarity of our readers. Source: EU Platform on Sustainable Finance. decent work in relation to employees in the company and along the value chain, with sub-goals such as strengthening social dialogue and promoting collective bargaining; decent living standards in relation to consumers, with sub-targets such as product safety, quality healthcare and housing, and. Yet social sustainability is not even in its infancy. You can read all about the basics of the EU Taxonomy in our previous post.As of this January 2022, approximately 12,000 public interest companies are required to indicate whether their economic activities are eligible for the EU Taxonomy. Our financial crime prevention policies and practices, Nordea's re-domiciliation of the parent company (2017-2018), Nordea's simplification of its legal structure (2016-2017), Foreign Account Tax Compliance Act (FATCA), Value Added Tax (VAT) registration number, Information regarding the re-domiciliation to Finland, G-SIB/G-SII: Systematic importance indicators, Intragroup exemptions from margin requirements, Nordean elkestio (Nordea's Finnish Pension Foundation), Students & interns at Nordea Markets LC&I, Bachelor of financial management and services, Nordea Group Legal trainee programme Norway, United Nations Guiding Principles on Business and Human Rights, Fundamental Principles and Rights at Work, Objectives are sorted along the three stakeholder groups, Social dialogue, living wages, health and safety, lifelong learning, 2. The EU and Gender Equality, by Agns Hubert, explores the progress and hurdles in the fight for equality between women and men at the EU level. According to sources, the EU Social Taxonomy has been postponed indefinitely due to difficulties in arriving to a common conceptual framework that would work at both the EU and global level. The report however risks death by commission neglect. We will never send you spam and you can unsubscribe anytime. Classification of activities will follow the NACE code classification as in the Environmental Taxonomy. After some delays, the EU expert group consisting of individuals from the public sector, industry and academia, released their final report on the proposed Social Taxonomy. The need is urgent and cannot be postponed. 2022 IFLR is part of the Euromoney Institutional Investor PLC group. The Social Taxonomy is a next step in defining a label for activities that contribute to and advance social welfare. Measuring the real impact of sustainable capital. A social taxonomy could be a step on the way to strengthening the social dimension of the EU. As detailed in our Taxonomy FAQ, a . RE No. Thomas has worked for a variety of media outlets, including Kashmir Observer, La Vanguardia, and Hrriyet Daily News. COP 27 leaders call for new era of implementation, EU Digital Markets Act needs to align with existing antitrust rules, Compliance teams adapt to greenwashing challenges, Private markets should get on with tackling ESG. Receive our newsletter - data, insights and analysis delivered to you, Select and enter your corporate email address. Lobbying by large companies to align the social taxonomy with the environmental taxonomy has also divided opinion and contributed to the delay. The group took into account feedback received last year and aligned the proposal with new and existing legislation in order to facilitate adherence for companies. Reflecting on the criticism received in the consultation period last year, the European Platform on Sustainable Finance ("the Platform") on Monday released its report that aims to inform the EU's policy decisions regarding . Its not only timing and its not only workload. We suggest they start, for example, by beginning to understand their potential contributions to objectives and sub-objectives, and how these may be communicated via current or proposed voluntary sustainability reporting. A social taxonomy would aim to address these issues and harmonise how social aspects are measured. To avoid social washing, complaint mechanisms should be provided for trade unions and works councils. Take a free no obligation one-month trial. Respect for human and workers rights should be a prerequisite. "Otherwise you could miss out on a lot of social value." It is, however, important to bear in mind that the two reporting directives, CSRD and SFDR, aim to define sustainability contributions on theentity level,whereas the Environmental and Social Taxonomies define substantial contribution on theactivitylevel. This would include, for example, promotion of collective bargaining or the strengthening of social dialogue. A key rationale and objective for a social taxonomy is to combat social washing, so the definition process must be subject to democratic debate and decision-making. Environmental and social issues have been cornerstones of the European Unions Sustainable Finance Strategy since its inception. A vertical dimension would be useful to identify economic activities making a substantial contribution to social objectives. Specifically, the platform highlighted that it was key that the three stakeholder groups parallel those outlined in the CSRD and reporting requirements, and thus topics will be overlapping to a large extent. The European Commission was asked to publish a report by the end of 2021, to assess the options available for extending the scope of the EU taxonomy to other sustainability goals such as social goals. Attitudes towards these and related themes vary widely across the EU. The draft is open to feedback until 27 August, with a finalised report to be submitted to the Commission for review in October. Sectors providing products and services for basic human needs e.g. The fundamental documents include: (i) the OECDGuidelines for Multinational Enterprises; (ii) theUnited Nations Guiding Principles on Business and Human Rights(UNGPs); (iii) the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labor Organization onFundamental Principles and Rights at Work; (iv) theInternational Bill of Human Rights; (v) theEuropean Pillar of Social Rights; and (vi) theEuropean Social Charter. An increasing demand for financial products which address environmental, social and governance (ESG) criteria underpins the political project to push sustainability through the financial sector and to direct investments towards sustainable economic activities. Does the European Care Strategy care about disability? Advice and provision of services related to the taxonomy could be provided by a public law agency, especially for small and medium-sized enterprises, co-operatives and non-profit business models. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way. Our results for the euro area and its four biggest economiesFrance, Italy, Germany and Spainindicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. The European Commission was asked to publish a report by the end of 2021, to assess the options available for extending the scope of the EU taxonomy to 'other sustainability goals such as social goals'. We are starting to live in a different world all politicians now care about is inflation, energy and keeping the lights on, says the trade association member. A substantial contribution would also exist if negative impacts on the three stakeholder groups mentioned above are thereby avoided. Irrespective of the uneven evolution of that riska sharp increase in the aftermath of the Great Recession of 2008 followed by an overall decrease in the past few yearspeople at risk of poverty represent a key target of social-protection and social-assistance schemes across the European Union member states and a persistent challenge for policy-makers. With the release of the final version of the EUs Environmental Taxonomy last year, companies and investors have become increasingly accustomed to the idea of a classification system and the provision of guidelines and definitions for sustainability matters. https://socialeurope.eu/author/judith-vorbach, https://socialeurope.eu/author/susanne-wixforth. The minimum safeguards will require companies to comply with the OECD guidelines for multinational enterprises and the UN guiding principles on business and human rights. But lack of clear definitions makes it difficult to evaluate social investments and resources and thus steer them toward socially-responsible activities and enterprises. In this context, the Platform for Sustainable Finance (Platform) has already presented a concept.The Platform proposes a similar structure for the social taxonomy as for the environmental taxonomy. Despite the major challenges involved, social contributions need to form part of any discussion on what constitutes a sustainable investment, says Pablo Berrutti, senior investment specialist at Australian fund house Stewart Investors. Thank you for subscribing to Capital Monitor. Thank you very much for your support! Her comments align with the concept of a just transition: the idea that all should benefit from the shift to a low-carbon world and no one should be left behind economically. News late last month that the European Commission (EC) had shelved its plans for a social taxonomy disappointed market participants but came as no huge surprise, in light of other developments, most notably the Ukraine war and its fallout. Nordea's Sustainable Finance Advisory team helps clients navigate fundamental changes in the financial markets as the global economy shifts towards becoming sustainable and low-carbon. 12: Why No Economic Democracy in Sweden? The proposed objectives and sub-objectives for the three stakeholder groups are outlined below. "To avoid blue-washing (social-washing), we need a social taxonomy just as . A substantial contribution would be recognised if criteria such as availability, accessibility, acceptability and quality (AAAQ) are fulfilled and none of the three main objectives violated. Still, even without the social taxonomy, the EU is working to address social issues through other pieces of regulation, including the minimum social safeguards project and a proposal for supply chain due diligence. Judith Vorbach is a member of the European Economic and Social Committee Workers' Group and chief economist of the Austrian Chamber of Labour. Its not that Ive given up on this [EC] entirely, but its clear were not going to get any significant new proposals the energy is a bit lacking, Van der Heide says. Susanne Wixforth is deputy head of the Economic Policy Department in the Vienna Chamber of Labour. ; to avoid blue-washing ( social-washing ), we depend on the three stakeholder groups mentioned above are avoided! 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