Skip to main content
Reform Support
Banner image for the EU Taxonomy Implementation and Sustainable Finance Roadmap in Estonia and Latvia page

Supporting reforms to develop well-regulated, stable and competitive financial markets

Funding Programme
  • 2021

EU Taxonomy Implementation and Sustainable Finance Roadmap in Estonia and Latvia

The Commission helped both the Ministry of Climate of the Republic of Estonia and the Ministry of Finance of the Republic of Latvia to achieve the Green Deal’s Climate goal of carbon neutrality, in line with the United Nations’ Sustainable Development Goals. This is accomplished by streamlining the flow of private capital towards sustainable projects and providing market players with guidance on the compatibility of their investment choices with their respective governments’ green commitments.


The EU taxonomy for sustainable activities entered into force in July 2020- in the context of the European Green Deal – with the aim of preventing greenwashing and supporting investors make greener choices. It is a classification system designed to determine the environmental sustainability of investments, according to six objectives: climate change mitigation, climate change adaptation, circular economy, pollution, effect on water, and biodiversity.

Estonia and Latvia aimed at classifying economic activities to assess the alignment with the EU Taxonomy. Moreover, they needed to develop an ambitious government strategy for sustainable finance, with a focus on the engagement with Small and Medium Enterprises (SMEs). The initial conditions and expected socioeconomic impacts were to be taken into account. Finally, the project is intended to identify and collect company-level Environmental, Social and Governance (ESG) data in a central database to increase transparency and promote sustainable development.

Support delivered

The project provided an analysis of barriers affecting the adoption of sustainable finance activities, mapped the economic activities according to the EU Taxonomy and assessed the investment gap. It ultimately outlined a National Sustainable Finance Roadmap with actionable policy recommendations tailored to the needs of each country, including an awareness-raising campaign targeting officials and businesses, as well as educational seminars for relevant stakeholders of both countries.

Even though the roadmaps of the two countries were designed separately, they were aligned, when possible, to the Lithuanian approach to sustainable finance development, as this country had already developed its draft roadmap.

The project was carried out with the support of the European Bank for Reconstruction and Development (EBRD).

Results achieved

The project will help Estonia and Latvia define the state of play and plan new initiatives to foster the development of sustainable finance, green financial products, and green capital markets, in accordance with EU policies and values, along with identifying investment opportunities for large companies, SMEs, start-ups and institutions.

Besides, this project will enable the Estonian and Latvian authorities to collect and use ESG data in order to finance sustainable growth over the long-term.

More about the project

You can read the final reports and linked documents here: