An investment fund scores its potential investments on a scale of one to ten based on the contributions they make to the environmental objectives under the EU taxonomy for sustainable activities. The following table shows how each company's score has changed over the past year. Which company most likely complies with the EU taxonomy for sustainable activities?

Transition to a Circular Economy Climate Change Adaptation Pollution Prevention and Control Total
Company 1 +6 -2 +3 +7
Company 2 0 +7 0 +7
Company 3 +3 +2 +2 +7

Question

An investment fund scores its potential investments on a scale of one to ten based on the contributions they make to the environmental objectives under the EU taxonomy for sustainable activities. The following table shows how each company's score has changed over the past year. Which company most likely complies with the EU taxonomy for sustainable activities?

Transition to a Circular Economy	Climate Change Adaptation	Pollution Prevention and Control	Total
Company 1	+6	-2	+3	+7
Company 2	0	+7	0	+7
Company 3	+3	+2	+2	+7

BlackTom AI · Accepted Answer

For EU taxonomy alignment a company must make a substantial contribution to at least one environmental objective and simultaneously do no significant harm (DNSH) to the other objectives. The fund’s 1–10 scores represent contribution strength; a large positive change (here +7) indicates a clear, substantial improvement toward an objective, while negatives indicate harm.

Step-by-step evaluation of each company using those rules:

1. Company 1: Scores +6 (Transition to Circular Economy), −2 (Climate Change Adaptation), +3 (Pollution Prevention). Although it shows a strong contribution to the circular economy (+6), the negative −2 for climate change adaptation signals it is harming another objective. That violates the DNSH requirement. Therefore Company 1 cannot be considered taxonomy-compliant despite its strong single-area gain.

2. Company 2: Scores 0 (Transition to Circular Economy), +7 (Climate Change Adaptation), 0 (Pollution Prevention). The +7 is a clear, substantial contribution to one objective (climate change adaptation). The zeros indicate neither contribution nor harm to the other listed objectives, so there is no evidence of significant harm. This pattern satisfies the “substantial contribution” plus “no significant harm” criteria in this simplified scoring context, so Company 2 most likely complies with the taxonomy.

3. Company 3: Scores +3, +2, +2 across the three objectives. While all contributions are positive, none is large enough to clearly qualify as a substantial contribution on its own (they are modest and diffuse). The taxonomy requires a substantial contribution to at least one objective; spreading modest gains across objectives without a pronounced substantial contribution makes Company 3 less likely to meet the alignment standard.

Why the correct answer is Company 2: it demonstrates a pronounced, concentrated improvement (+7) in one objective and shows no negative impacts elsewhere, meeting both the substantial-contribution and DNSH requirements. This confirms the provided answer: Company 2.

类似问题

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