A European regulatory framework to distinguish sustainable activities and their degree of contribution to environmental sustainability.
Adopted on June the 18th, 2020 by the European Parliament and the Council of the European Union, the Taxonomy is a European regulation (2020/852 DU), classifying activities considered sustainable.
In line with 2015 Paris Agreements and the 2019 European Green Pact, this regulation is an essential step towards the objective of a climate neutral Union by 2050.
The Taxonomy aims to encourage economic actors to identify their positioning in relation to the EU's sustainable transition trajectory, and to enable financial actors to prioritize the allocation of funding to the most contributing projects and assets.
It establishes a set of specifications for listing activities and assessing their contribution to one or more of the 6 environmental objectives:
The first delegated act on sustainable activities for climate change adaptation and mitigation objectives was published on December 9, 2021 and applicable on January 1, 2022. The second delegated act for the other objectives will be published during 2022.
As of January 1, 2022, all companies subject to the NFRD (or DPEF in France) are mainly concerned, i.e. approximately 11,700 large companies in Europe. This perimeter will be enlarged with the implementation of the CSRD between 2024 and 2026, which will include 38,000 additional companies in Europe (in particular companies with more than 250 employees or €40 million in turnover).
The Taxonomy is based on a three-step process to measure eligibility, contribution and alignment of activities.
1. Identify eligible activities that contribute to the six environmental objectives
To be eligible, the company must identify its activities from the list of around 80 activities. These activities, themselves listed in 13 macro-sectors, represent 90% of GHG emissions in the Union.
2. Study the alignment with the technical criteria
3. Measure the contribution and associated KPIs
Actors must calculate and publish the share that aligned activities represent in its overall activity, illustrating its degree of alignment with the EU transition path.
January 1, 2022
January 1, 2023
January 1, 2024
Disclaimer: this page is a proposal for a synthesis and popularization of the texts, these texts are evolving and complex, this synthesis is by definition incomplete, and may be obsolete due to regulatory changes. It is necessary to always refer to the official texts available on ec.europa.eu. Photo by Silas Baisch on Unplash.