Classification of the EU taxonomy for sustainable activities among other sustainable finance taxonomies worldwide

Abstract The EU Taxonomy sets standardized rules with technical screening criteria (TSC) to define sustainable activities and guide low-carbon investments. This paper compares the EU Taxonomy with other national taxonomies, based on a content analysis, focusing on structure, scope, and energy sector criteria. Findings show most taxonomies align with similar policy goals and environmental objectives. The EU Taxonomy’s rigorous TSC approach, including substantial contribution (SC) and do-no-significant-harm (DNSH) criteria, serves as a model for others. Some of those taxonomies, such as the South African one, even improved some criteria. Non-EU-based taxonomies often lack comprehensive DNSH criteria, increasing greenwashing risks. This study underscores the importance of harmonizing taxonomy design, especially through the adoption of robust, practical technical criteria, and promoting a technology-neutral approach to foster interoperability and prevent the exclusion of innovative solutions. Harmonization of classification systems and standardized definitions are vital to improve cross-jurisdictional comparability and efficient policy coordination. While national contexts require flexibility, enhanced alignment in taxonomy requirements and governance structures is critical to improving interoperability, comparability, and the overall effectiveness of sustainable finance taxonomies worldwide. Graphical Abstract