There is a lack of a unified definition for what “sustainability” means and what is a “sustainable activity”. The EU Sustainability Taxonomy is the EU’s recent attempt in developing “a science-based unified EU classification system for sustainable activities” with the aim to create a “shared understanding of what ‘sustainability’ means”. This study aims to explore the EU Sustainability Taxonomy policy, its functions and history, using public policy process analysis as its framework and method. The EU taxonomy was defined, and its impacts were discussed, the taxonomy was used to define a sustainable activity and demonstrate the taxonomy in action to calculate the taxonomy alignment of a fictional automotive manufacturer. Using the public process analysis the taxonomy was traced back to its origin with the identification and discussion of the key events and milestones, which led to the creation of the EU Sustainability taxonomy. These findings were analysed and explained using the Lindblom (1959) theory of “successive limited comparison” and the theory of incrementalism (Bevir, 2007).