New research has found that many Irish financial-services firms are not aware of an EU system designed to help companies, investors and policy-makers to decide which economic activities are sustainable for the environment.

The research was carried out by the Compliance Institute, an organisation for professionals working in the areas of compliance and regulation.

The EU's Taxonomy Regulation creates a classification system that provides a common definition of economic activities that can be considered ‘environmentally sustainable’.

8% have ‘good knowledge’

The figures from the Compliance Institute showed that just 8% of companies surveyed had ‘good knowledge’ of the scheme, with 52% claiming ‘a basic understanding’.

A further 27% did not yet know about it, but said that they were in the process of researching and learning about it. The survey found that 13% of firms did know anything at all about the system.

Michael Kavanagh (CEO of the Compliance Institute) said that the classification system introduced under the regulation would help investors to have greater certainty that they were investing in projects and activities that were in line with EU environmental targets.

Disclosure

The regulation was officially adopted three years ago.

Affected companies will have to disclose the extent of their activities that are aligned with the system in their financial year-end reports.

Despite what the institute described as the “low levels” of knowledge among some firms, almost half of the 125 firms surveyed supported the idea of the regulation.

Half of the firms stated that they were less sure, because of the burden on companies, while 2% were opposed to the measure.