Green Economics

The EU Taxonomy classifies environmentally sustainable economic activities, not companies. This distinction is often treated as a technical feature of disclosure, yet it becomes economically significant when Taxonomy metrics are incorporated into corporate financing. This article asks under what conditions activity-level EU Taxonomy alignment can become an issuer-level greenwashing risk when carbon-intensive companies use it in sustainable debt financing. It develops a structured comparative case study of RWE and Enel, two large European utilities that combine material fossil-fuel exposure with extensive Taxonomy disclosure and sustainable debt issuance. The analysis distinguishes use-of-proceeds green finance from sustainability-linked general-purpose finance and evaluates four dimensions: the scope of Taxonomy alignment, the way alignment enters financing, residual firm-wide carbon exposure, and the trajectory of actual emissions. The findings show that high aligned CapEx can coexist with much lower aligned turnover and substantial current emissions. RWE ring-fences green-bond proceeds to eligible green projects, whereas Enel directly links general-purpose debt pricing to a Taxonomy-aligned CapEx KPI alongside emissions targets. The article concludes that this coexistence is not, by itself, evidence of greenwashing. The central risk is a scope conversion: an activity-level classification can acquire a broader issuer-level meaning in financing or communication. That risk is reduced where proceeds are ring-fenced, firm-wide emissions are disclosed, and Taxonomy KPIs are paired with measurable decarbonization targets.