EU Taxonomy Reporting
For the financial year 2023, non-financial companies required to publish non-financial information according to the non-financial reporting directive (NFRD, 2014/95/EU) are required to also report on their performance regarding the EU taxonomy.
From 2024 onwards, which companies need to report taxonomy-relevant information is defined by the corporate sustainability reporting directive (CSRD, EU 2022/2464). The CSRD also provides a location for taxonomy information within a company’s management report.
What does EU Taxonomy reporting require from companies?
The EU taxonomy requires companies to report on their performance on how much of their key performance indicators (KPIs) related to turnover, capex and opex align with the EU taxonomy.
📋 This means that companies need to document the following:
That they
- make a substantial contribution to at least one of the six environmental objectives defined in the EU taxonomy,
- do no significant harm to any other environmental objective,
- comply with defined minimum social safeguards on a company level
This requires companies to collect sustainability-related data from their own operations and from their suppliers.
💡 Reading recommendation: Everything you need to know about EU Taxonomy
Collection of information and data for EU Taxonomy reporting
The amount of information required varies greatly between activities, which is why it is important to check which criteria apply to the company’s taxonomy-eligible economic activities. In some cases, the required information concerns calculations of GHG emissions or the collection of technical data related to the products or services provided. In other cases, the criteria require compliance with national or EU legislation. In the latter case, compliance with the underlying legislation needs to be checked.
An example is the DNSH criteria for pollution prevention that requires that the products covered by the economic activity do not result in the manufacture or use of hazardous chemicals defined in key chemicals legislation such as the REACH regulation (EC 1907/2006) etc. This is a requirement where you might need to check with your own suppliers whether these substances are used in parts or materials provided.
How to keep track of your data
With 94 activities defined under the climate change mitigation (CCM) objective and 101 activities defined under the climate change adaptation (CCA) objective, companies already have a lot of information they need to keep track of, including changes in underlying legislation that are referred to in the technical screening criteria. With the publication of the environmental delegated act and further amendments to the climate delegated act in June 2023, further 7 activities under CCM and 4 activities under CCA were added.
The publication and adoption of the Environmental Delegated Act also increased the number of activities by adding 6 activities each under water and marine resources and pollution prevention and control, 21 under circular economy, and 2 under biodiversity and ecosystems. The amount of information companies are required to keep track of has already increased tremendously.
Streamline EU Taxonomy reporting with Ecobio Manager
A digital solution can further help you to manage the requirements and help you process all the steps required for successful EU Taxonomy reporting. The taxonomy tool in Ecobio Manager is the most comprehensive solution for EU Taxonomy classification and reporting on the market and can help you to simplify the classification and reporting process.
🚀 Ecobio Manager provides a thorough work process:
- conducting eligibility and alignment assessments of own activities;
- link activities to the relevant underlying legislation;
- allows users to assess compliance with the relevant legislation;
- conduct and document environmental risk assessments;
- the ready-classified activities can be merged with the relevant financial information;
- produce the KPI tables following the templates defined in the EU taxonomy.
