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A growing number of scientists have advocated for greater use of wood-based products due to its durability, an ability to store carbon for a long time, and an ability to be used multiple times through recycling. The elements of forest-based circular bioeconomy have already been well-received in Nordic countries and Sweden in particular. This type of circular economy is deemed to foster both environmental sustainability and cost reduction due to the high resource efficiency of wood as a material. Despite the recognized importance of low-carbon transition, the forestry sector and forest-based circular businesses are claiming to be dealing with a green finance gap due to mainly unstable policies and a general lack of tools to demonstrate sustainability. The newly adopted EU Taxonomy is claimed to provide holistic «screening criteria» to help indicate sustainable economic activities of companies, including the forestry sector, and translate it onto the sustainable financial markets. However, no previous research was indicated to assess the EU Taxonomy's impacts on the forestry sector. Thus, this study explores the challenges and opportunities large forest-based circular Swedish companies have experienced during the first stage of implementation of the EU Taxonomy and to what extent it is expected to impact these companies' access to sustainable finance. For this purpose, this thesis adopts a qualitative design. Empirical findings were gathered by using a mixed- methods approach. It first included semi-structured interviews among selected representatives of the largest Swedish forest companies and intermediaries. Second, study explored available documentation, namely annual reports, of the respondents to see they have adopted to the EU Taxonomy. The theoretical framework, including the theory on Institutional Change and Weak-Strong Sustainability, supported the analysis of empirical findings. Results show that the overall impact of the EU Taxonomy is uncertain. The implementation challenges might not be just a lack of the technical criteria for forest operations but a fundamental difference in defining sustainable forest management. What became clear during the interviews was that the EU Taxonomy as a new sustainability reporting framework provides reporting benefits in terms of flexibility and an activity-centered approach, a wide range of environmental objectives covered, and a holistic approach to organizational structures to be involved in the reporting process. The current motivation to adopt the mandatory EU Taxonomy was described in terms of «ceremonial accountability» and not due to possible improvements in sustainability representation. Participants introduced consensus in minimal policy adoption and awaiting response from financial actors. They claimed that at this stage, the degree of the EU Taxonomy implementation for forest companies depends on the level of demands for capital requirements investors experience under the EU Taxonomy themselves. Although forestry companies did not indicate any changes in their current reporting strategy and access to sustainable finance, in the long-term perspective, the complexity of the EU Taxonomy was claimed to create risks for non- or low-compliant companies to access new EU Taxonomy-inspired financial products. Nonetheless, this study highlighted the need for a constant dialogue with the financial market and a set of gradual precautionary measures to coordinate further tightening the EU Taxonomy criteria before 2023.