On 28 February 2022, the Platform on Sustainable Finance issued a report proposing a structure for a social taxonomy within the current EU legislative environment on sustainable finance and sustainable governance. The current environment consists of: (i) the existing legislation and proposed initiatives on the EU taxonomy; (ii) the proposed corporate sustainability reporting directive; (iii) the Sustainable Finance Disclosures Regulation; and (iv) the sustainable corporate-governance initiative.
Starting from internationally agreed documents on human rights, the objectives for a social taxonomy are set out in the report according to the type of stakeholders that economic activities can affect. Stakeholders affected by business activities include an entity’s: (i) own workforce (including value-chain workers); (ii) end-users/consumers; and (iii) affected communities (directly or through the value chain). The suggestion therefore is that a future social taxonomy should be centred around these three groups of stakeholders to whose lives and livelihoods economic activities can make a positive contribution.