EU taxonomy as an instrument of sustainable finance: prospects for implementation in Ukraine

Abstract

Problem setting. The global transition toward environmentally sustainable economic activities is driven by the need to protect the environment and reduce dependence on fossil fuels. The EU Taxonomy has become a central regulatory tool for directing capital into green and climate-neutral projects and now serves as a reference point for countries seeking closer integration with European financial markets. Ukraine faces the task of adapting this framework to its legal system, which is essential both for meeting EU integration commitments and for attracting investment into post-war reconstruction, particularly in renewable energy. Analysis of recent research and publications. The development of a national taxonomy of sustainable activities and the principles of sustainable finance has been addressed by Ukrainian scholars such as A.A. Honta, M.Yu. Hryhorak, O. I. Volovyk, I. O. Makarenko, R.M. Fominov, N.V. Trushkina, H. P. Bortnikov, T. V. Oriekhova ta O. M. Riabchyn. Purpose of research. To examine the development process, legal mechanisms, and institutional architecture of the EU Taxonomy, to assess the state of its implementation in Ukraine, and to formulate recommendations for introducing a national taxonomy of sustainable economic activities. Article’s main body. The article examines the evolution, legal mechanisms, and institutional architecture of the EU Taxonomy as a classifier of sustainable economic activities, including Regulation (EU) 2020/852 and the relevant delegated acts. It demonstrates the Taxonomy’s integration into financial and corporate disclosure regimes under the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). The role of the European Commission, the Platform on Sustainable Finance, the Member States Expert Group, and the European Supervisory Authorities in shaping and updating technical screening criteria is characterized. Emphasis is placed on the market effect of transparency: although the Taxonomy does not impose prohibitions, its standardised disclosure requirements reduce information asymmetry, highlight transformational and regulatory risks associated with brown assets, and stimulate the reallocation of capital towards green projects, particularly renewable energy. The article analyses the current state of introducing a national taxonomy in Ukraine, revealing the absence of a legally established system despite fragmented initiatives by the NSSMC, NBU, the Ministry of Economy, and other coordination platforms. It concludes that dynamic alignment with EU law and the introduction of sustainability disclosure obligations are essential prerequisites for accessing international capital. It is recommended to adopt a national taxonomy based on the requirements of Regulation (EU) 2020/852 and the accompanying ESG-related acts; to establish an interagency body under the NSSMC responsible for developing and updating technical criteria; to define mechanisms of coordination among key public authorities; and to introduce a system for training specialists in sustainable finance. Conclusions and prospects for development. For the effective implementation of the taxonomy in Ukraine, it is recommended to: (1) adopt a national taxonomy based on the provisions of Regulation (EU) 2020/852 on taxonomy and the accompanying regulatory acts (including ESG disclosure requirements for large enterprises and financial institutions); (2) establish a specialised interagency body under the National Securities and Stock Market Commission (NSSMC) responsible for developing and updating technical screening criteria in alignment with the EU Taxonomy; (3) define the distribution of competences and mechanisms of coordination among the NSSMC, the Government Office for European and Euro-Atlantic Integration of Ukraine, the Green Transition Office under the Ministry of Economy, the Ukrainian Climate Office (including the Sustainable Finance Platform), and the National Bank of Ukraine regarding the national taxonomy; (4) create a system for training specialists in sustainable finance through the “Diia.Osvita” platform to ensure the capacity of banks and companies to comply with the new requirements.