The EU Commission still has fond memories of the discussion about its criteria for sustainable financial investments that serve climate protection.

The outrage was too great, especially in Germany, that the unloved nuclear power, like gas energy, was classified as a transitional technology in the EU taxonomy and is therefore compatible with sustainable financial investments.

Opinions differ on what is really sustainable and protects the climate.

But in February, the Commission tackled an even more difficult subject: social taxonomy.

Markus Fruehauf

Editor in Business.

  • Follow I follow

The term "social" is strongly linked to personal values ​​and is therefore very difficult to define in general.

The 84-page report presented in Brussels in February was correspondingly vague.

It has three primary goals: good working conditions for employees and suppliers, the well-being of customers and finally an inclusive society.

This opens up a very wide range of what can be classified under it.

Not to be forgotten are the possible contradictions to ecological sustainability.

A good example is the increase in energy prices, which the federal government wants to cushion with relief packages.

This can be classified as social, but probably not as ecologically sustainable.

Because rising prices are forcing savings, which would be better for the environment given the renaissance of coal and nuclear energy.

After Russia's invasion of Ukraine, even arms manufacturers are wondering if they can't also be “social” by helping a country defend itself against an aggressor.

“Equal Recognition for Social Sustainability”

Despite these open questions, it is primarily the church pews who are campaigning for the social taxonomy.

In a recent letter, the board of directors of the Evangelical Bank of Brussels calls for more impetus in the establishment of the social taxonomy.

It was time for the next steps to be taken.

"Only a binding framework can provide companies, investors and lenders with clear guidelines as to what socially sustainable economic activities are," writes the board of directors in a letter to the Commission available to the FAZ.

If such a framework in the form of a social taxonomy were to come too late or not at all, this would have serious disadvantages for all those involved in the social sector, CEO Thomas Katzenmayer and the two board members Joachim Fröhlich and Olaf Kreuzberg fear.

They urge you to hurry because the activities of a hospital operator can hardly be described as sustainable in the sense of a taxonomy.

In her opinion, the situation is similar for the care sector or assistance for the disabled.

According to the board of directors of the Evangelische Bank, the health and social economy should be measured with different standards than, for example, industrial sectors.

"Because the health and social economy supports the social foundation of our European economies, but unlike the chemical or automotive sectors, it does not have too many investment and financial options to reduce its CO2 emissions."

There can therefore only be one logical consequence for the board: socially sustainable activities must be recognized as well as ecologically sustainable activities.

From this he deduces that the health and social economy can compensate for the lack of potential for improvement in climate and environmental protection thanks to its special orientation towards the common good.

According to the Board of Directors of Evangelische Bank, more capital can be channeled into socially sustainable activities with a speedy and legally binding taxonomy.

The corona pandemic saw a wave of social bond issues.

These “social bonds” were used, among other things, to finance the EU’s pandemic programs.

Typically, these titles are issued by healthcare providers or companies and banks involved in social housing.

Many asset managers try to implement the "S" in their ESG investments - the abbreviation stands for the English terms Environment (environment), Social (social) and Governance (good company management) - by means of exclusion criteria.

Then, for example, there will be no investments in weapons manufacturers or countries with human rights violations.