The EU taxonomy is a classification system, establishing a list of environmentally sustainable economic activities. It could play an important role helping the EU scale up sustainable investment and implement the European green deal.
Attention! This website is still an ongoing project. Therefore, the content is currently under development.
Content of this page:
- Environmental objectives
- Conditions for economic activities
- Disclosure requirements
- Reporting format
- Links and Sources
Please cite this register in conjunction with the following article:
Hummel, K., Jobst, D., 2023. An Overview of Corporate Sustainability Reporting Regulations in the European Union. https://ssrn.com/abstract=3978478.
The Taxonomy Regulation was proposed as part of the EU Action Plan on Financing Sustainable Growth (COM(2018) 97 final), which aims at redirecting capital flows toward a more sustainable economy.
For that purpose, the Taxonomy Regulation applies to policy measures targeting sustainable financing activities, financial market participants within the scope of the SFDR and companies subject to the NFRD and CSRD.
|Delegated acts by the European Comission:||On 13 June 2023 two delegated acts were published:|
|Adoption of the regluation:||18 June 2020|
|Application:||Applicable from January 2022 onward (covering financial year 2021 onward)|
|Transitional period:||A transitional application period relates to financial year 2021 for nonfinancial undertakings and to financial years 2021 and 2022 for financial undertakings.1|
For the transitional period, only taxonomy-eligible activities2 and only with regard to climate change adaptation and climate change mitigation must be reported.
|Prospect:||The Taxonomy Regulation will be further developed over time to also cover socially sustainable activities.|
1 Article 10 of Commission Delegated Regulation (EU) 2021/2178
2 Economic activities are defined as taxonomy-eligible if they are listed in the delegated act that specifies the technical screening criteria (2021/2139). Taxonomy-alignment further requires adherence to the substantial contribution criteria, the DNSH principle and the minimum safeguards.
The Taxonomy Regulation applies to
The Taxonomy Regulation defines the following six environmental objectives:
climate change mitigation;
climate change adaptation;
the sustainable use and protection of water and marine resources;
the transition to a circular economy;
pollution prevention and control; and
the protection and restoration of biodiversity and ecosystems.
Each environmental objective is defined in Article 9 and delineated in greater detail in Articles 10-15 of the regulation.
Conditions for economic activities
The Taxonomy Regulation defines three conditions that an economic activity must meet to qualify as environmentally sustainable, also referred to as ‘taxonomy-aligned’:
the activity must substantially contribute to meeting at least one of the six environmental objectives;
the activity does not significantly harm meeting any of the six environmental objectives;
the activity is carried out in compliance with minimum safeguards
These conditions are further delineated in Articles 16-18 of the regulation.
The technical screening criteria for determining which activities substantially contribute to climate change mitigation (Annex I) or climate change adaptation (Annex II) are defined in the following delegated regulation (Commission Delegated Regulation (EU) 2021/2139). For sustainable use and protection of water and marine resources (Annex I), the transition to a circular economy (Annex II), pollution prevention and control (Annex III), and the protection and restoration of biodiversity and ecosystems (Annex IV) the technical screening criteria are defined in the following delegated regulation (Commission Delegated Regulation (EU) 2023/3851).
A separate delegated regulation (Commission Delegated Regulation (EU) 2022/1214) defines those criteria for fossil gas and nuclear energy sectors.
The Taxonomy Regulation distinguishes between taxonomy-eligible and taxonomy-aligned economic activities. An economic activity is taxonomy eligible if it is listed in the annexes of the delegated regulation that defines the technical screening criteria. Taxonomy alignment further requires adherence to the SC and DNSH criteria and the minimum safeguards.
Nonfinancial companies must disclose the proportion of ...
capital expenditures (capex) and
operating expenditures (opex)
... associated with environmentally sustainable activities.
The content and presentation of the information is further specified in a delegated regulation (Commission Delegated Regulation (EU) 2021/2178).
Updates to this page:
|14 September 2023||Updates in the sections 'Conditions for economic activities' and 'Disclosure requirements'|
|16 June 2023||Added the two delegated acts to the overview.|
|20 March 2023||Updated the sections 'Disclosure requirements' and 'reporting format'.|
|15 September 2022||Update to the current status of the EU Taxonomy.|