IBERSOL | Annual Report 2021

Environmental Performance Taxonomy Background on EU Green Taxonomy One of the priorities of the European Union is to streamline capital flows to sustainable investments, promote the systematic integration of sustainability in risk management, and increase transparency in economic and financial operations, according to a consensual defini- tion of what constitutes “green activities”. It was in this context that “EU Green Taxonomy” arose, along with other relevant initiatives connected to the non-financial report- ing (CSRD) and the sustainable financial reporting (SFDR), which henceforth shall be referred to as Taxonomy, through the publication of Regulation (EU) 2020/852 of the European Parliament and the Council, 18 June, 2020. Taxonomy is an activity classification system that translates the cli- mate and environmental goals of the EU in terms of investment cri- teria in certain economic activities that are considered green, or en- vironmentally sustainable. This system applies to companies that are under the obligation to publish a non-financial report, such as the Ibersol Group, besides all stakeholders in the financial market (in- cluding unlisted issuer companies) that provide financial products. Within the framework of Taxonomy, and regarding economic activi- ties that are considered eligible, all organisations are expected to state if, besides respecting a set of minimum social safeguards, they provide a substantial contribution and/or do not significantly harm any of the following six goals: 1. Climate change mitigation 2. Adaptation to climate change 3. Water and water resource protection 4. Transition to a circular economy 5. Pollution prevention and control 6. Protection and restoration of biodiversity and ecosystems 154