Overview
The Independent Science-Based Taxonomy (ISBT) was developed as a response to concerns about the scientific integrity of some EU Taxonomy criteria. The Platform on Sustainable Finance (PSF) – the Commission’s permanent expert group mandated to develop technical recommendations for taxonomy criteria – provides a very valuable foundation based on scientific knowledge and broad stakeholder input; but its technical recommendations are not always followed by the Commission which can be significantly influenced by counterproductive lobbying efforts from member states and industries. This has led to the inclusion in the EU Taxonomy of some criteria that deviate from scientific evidence and are scientifically weak or unevidenced, particularly in sectors such as gas-fired and nuclear power plants, forestry, bioenergy, shipping, aviation, and plastic packaging – while EU Taxonomy criteria are robust in several other sectors. In turn, several EU Taxonomy criteria not deemed science-based have been challenged in various pending lawsuits.
To address these shortcomings and ensure the highest level of scientific rigour, the ISBT was developed through a rigorous, multi-step process. The ISBT duplicates the EU taxonomy criteria wherever they are robust and only departs from them when they are scientifically weak or unevidenced. In these cases, in a cascading way, the technical experts of the ISBT recommend alternative criteria – building first on the PSF technical recommendations or otherwise on any other relevant framework. The process involves a comprehensive assessment of the EU Taxonomy criteria (and/or the PSF recommendations where relevant), extensive data analysis, expert evaluation, and refinement and recommendations if deemed necessary. By critically evaluating the EU Taxonomy criteria against the latest scientific evidence, the ISBT aims to provide a clear and transparent assessment of the degree to which each criterion is science based. The ISBT scores EU Taxonomy criteria with three grades: Science Based (criteria should be used); Partially Science Based (criteria can be used but should be improved); Not Science Based (criteria should be avoided).
Methodology
Step 1: Technical Expert Group Establishment and Working Subgroup Formation
- Expert Selection: A Technical Expert Group (TEG) composed of renowned experts in sustainability, finance, environmental science, and related fields was assembled. Their expertise spans various environmental issues, economic sectors and geographic regions. New members can join the TEG if relevant.
- Working Subgroup Creation: Specialized working subgroups are formed to focus on specific economic activities or sectors, enabling in-depth analysis and tailored recommendations.
Step 2: Data Compilation and Analysis
- EU Taxonomy Criteria Review (and/or PSF Recommendations Review where relevant: A comprehensive analysis of the EU Taxonomy criteria (and/or of the PSF’s recommendations where relevant) is conducted, including underlying data and rationale.
- Scientific Literature Review: A thorough examination of the latest scientific research on climate change, biodiversity, and environmental impacts is undertaken.
- Policy Landscape Assessment: Relevant EU and international policies and regulations are reviewed to identify relevance for the ISBT criteria.
Step 3: Criteria Evaluation, Scoring and Refinement
- Critical Assessment: The EU Taxonomy criteria (and/or PSF recommendations where relevant) are subjected to rigorous evaluation against the collected data and scientific evidence.
- Gap Identification: Specific areas are identified where the EU Taxonomy criteria (and/or the PSF recommendations where relevant) are assessed as outdated, incomplete, or lacking scientific rigour.
- Criteria Scoring: Building on the above assessment, EU Taxonomy criteria are scored with three grades: Science Based; Partially Science Based; Not Science Based. Where the ISBT has no expertise, the mark ‘Not Reviewed by ISBT’ is assigned.
- Criteria Development: In the cases where EU Taxonomy criteria are scored as partially science-based or not science-based, revised criteria are developed based on the latest scientific knowledge and technological innovation. New criteria can also be developed for new activities not included in the EU Taxonomy and/or PSF recommendations.
Step 4: Criteria Validation
- TEG Review: The criteria developed by working subgroups are shared with the full TEG for review and feedback.
- Iterative Refinement: Criteria are revised based on TEG input to enhance their clarity, consistency, and scientific soundness.
- TEG endorsement: Once finalised, the criteria are endorsed by the TEG. The opinions expressed in the TEG do not represent the official position of the organisations and individuals working in the ISBT initiative.
Step 5: Transparency and Communication
- Criteria Publication: The criteria are published on the ISBT website.
- Rationale Publication: Detailed explanations for all deviations from the EU Taxonomy criteria (and/or PSF recommendations where relevant) are provided.
- Public Communication: The ISBT is disseminated through various channels, including potential reports, webinars, social media, and media outreach.
Future Development
While the ISBT criteria are being developed through a rigorous process, we fully recognise the importance of stakeholder engagement and further validation. With increased resources, we aim to enhance the methodology by:
- Stakeholder Engagement: Conducting workshops and potentially consultations to gather feedback on the ISBT and incorporate it into future iterations. For any comments regarding the ISBT please contact us.
- Pilot Testing: Applying the ISBT in practice to assess its effectiveness, usability, and to identify areas for improvement.
- Continuous Improvement: Regularly reviewing and updating the ISBT to reflect evolving scientific knowledge, policy developments, and technological innovation.
By incorporating these additional steps, we aim to strengthen the ISBT’s relevance, robustness, and utility for the financial sector and beyond.
