EU Taxonomy KPIs – the Key Performance Indicators of Sustainable Finance
EU Taxonomy KPIs, short for Key Performance Indicators, are essential to the EU Taxonomy puzzle. The EU Taxonomy covers 6 environmental objectives, under which activities and their corresponding technical screening criteria are defined.
The EU Taxonomy requires companies to classify their environmentally sustainable economic activities and investments and report related economic key performance indicators (KPIs) annually. The EU Taxonomy targets financial market participants and non-financial companies in key sectors relevant to achieving the environmental targets defined under the EU Green Deal.
What are the required EU taxonomy KPIs for non-financial companies under the regulation?
To comply with the EU Taxonomy, companies must report in 4 steps. One of these steps is to disclose the proportion of the company’s aligned turnover, CapEx, and OpEx, all technical screening criteria fulfilled, or eligible under the environmental objectives. These KPIs need to be presented for each relevant activity defined in the EU Taxonomy, ensuring no double counting, in addition to the total KPIs for the company. In addition to the proportions, companies need to provide the absolute numbers underlying the calculations.
The information should be accompanied by qualitative information, such as how the KPIs were determined. In addition, the figures of each KPI and the reasons for any changes in those figures in the reporting period should be provided.
How to report on the EU Taxonomy KPIs?
| Turnover | Net turnover means the amounts derived from the sale of products and the provision of services after deducting sales rebates, value-added tax, and other taxes directly linked to turnover. |
| Capital Expenditures | The CapEx KPI provides a forward-looking view of companies’ plans to transform their business activities to align with environmental objectives. Companies must disclose the proportion of their capital expenditure related to assets or processes associated with either taxonomy-aligned economic activities or activities that are part of a plan to extend or reach taxonomy alignment (CapEx plan). |
| Operational Expenditures | Companies shall disclose the proportion of operational expenditures related to assets or processes associated with taxonomy-aligned economic activities or the CapEx plan. The OpEx KPI cover direct non-capitalised costs related to research and development, building renovation measures, short-term lease, and maintenance and repair. Other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment necessary to ensure continued and effective functioning the assets is also included. |
Accompanying qualitative information | Companies shall explain their accounting policies. They shall explain how turnover, capital, and operational expenditures were determined and allocated. In addition, companies need to describe the nature of the Taxonomy-eligible and Taxonomy-aligned economic activities and explain how compliance with technical criteria is assessed. Companies also need to explain how they avoided double accounting across economic activities. |
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Ecobio Manager for reporting EU Taxonomy KPIs
Ecobio Manager allows flexible integration to input annual KPI data into the system and automatically maps KPI data with classification results. Our SaaS solution collects primary data from various locations and subsidiaries for final consolidated reporting, avoiding double counting.
Ecobio Manager also helps with providing the necessary qualitative information. Our software allows you to directly enter or upload qualitative information during the classification process, automatically combining the classification results with financial data. In addition, Ecobio manager creates formal reporting according to the official template and automatically updates the compliance assessments with the Technical Screening Criteria and legal requirements.
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