Minimum safeguards - what they are and how to handle them?

Minimum Safeguards – What Are They?

The approach to (social) minimum safeguards appears in various recent EU regulations and addresses the negative impacts of economic activities. According to Article 18 of the EU Taxonomy Regulation (EU) 2020/852, the so-called minimum safeguards aim to ensure that an economic activity can only be considered "sustainable" (taxonomy-aligned) if it complies with international human rights standards and regulations on issues such as bribery and corruption, taxation, and fair competition. These standards are intended to help shape future economic activities to be not only climate-friendly but also compliant with human rights and fair practices.

The underlying guidelines mentioned in Article 18, which serve as the basis for the minimum safeguards, target a wide range of audiences, from governments to multinational companies and other organizations. Article 18 outlines the following key frameworks:

• OECD Guidelines for Multinational Enterprises,
• United Nations Guiding Principles on Business and Human Rights,
• Fundamental principles and rights from the eight core conventions of the International Labour Organization (ILO), and
• The International Bill of Human Rights.

How Do You Address This in Daato?

Daato has translated the relevant criteria from the Taxonomy Regulation into user-friendly and easy-to-understand questions that you can answer. We also recommend uploading any supporting documents, such as for audit purposes, to provide evidence for your responses.

In Daato, you answer these questions for each taxonomy activity. If you meet the standards, you can proceed with the taxonomy eligibility assessment. If you do not meet the standards, there is no opportunity to achieve taxonomy alignment.