EU taxonomy

The Paris Agreement was adopted at the 2015 UN Climate Change Conference with the goal of achieving climate neutrality by 2050. To achieve this goal, the EU has established the “Financing Sustainable Growth” action plan. The EU Taxonomy is a core component of this action plan and is intended to contribute to the sustainable transformation of the economy.

Originally, only large publicly listed companies with more than 500 employees were required to disclose the EU Taxonomy in their non-financial statements starting in 2023. With the implementation of the CSRD and the Omnibus Revision, this scope has now changed. In conjunction with the CSRD, the reporting requirement now applies to companies with more than 1,000 employees and net revenue exceeding 450 million.

What is the EU taxonomy?

With the introduction of the EU taxonomy, the EU is providing a classification system that both enables the identification of environmentally sustainable economic activities and establishes a common understanding of sustainability.

The classification system is based on six environmental objectives established under the EU Taxonomy Regulation. With these six environmental objectives in mind, the EU has adopted two delegated acts (Climate Act and Environment Act) that serve as the basis for identifying environmentally sustainable economic activities:

Currently, the EU Taxonomy includes over 240 economic activities, which are categorized in the delegated acts according to environmental objectives and cover a total of 16 sectors. If an economic activity is listed in one of the delegated acts, it is eligible for the taxonomy, i.e., potentially environmentally sustainable within the meaning of the EU Taxonomy.

Take a closer look at the sectors and economic activities in the EU Taxonomy Compass here.

It should be emphasized, however, that no economic activity can be classified as sustainable per se under the EU Taxonomy. For an economic activity to be considered environmentally sustainable or taxonomy-compliant, several conditions must be met.

The key requirement is that an economic activity must make a significant contribution to one of the environmental objectives without simultaneously undermining any other environmental objective. To ensure this, the EU has established so-called technical assessment criteria for each economic activity included in the delegated acts. Companies must therefore assess and meet these criteria in order to declare an economic activity as sustainable within the meaning of the EU Taxonomy.

In addition to evaluating taxonomy compliance, certain quantitative and qualitative disclosures must be made. These include, on the one hand, information on the taxonomy process within the company and, on the other hand, the disclosure of key figures such as revenue, capital expenditures (CapEx), and operating expenses (OpEx) [including the corresponding taxonomy-eligible and taxonomy-compliant portions].

Furthermore, companies must demonstrate compliance with the Minimum Safeguards. The requirements are based primarily on the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, and the International Bill of Human Rights.

Our services in the area of EU taxonomy consulting

Our interdisciplinary team would be happy to assist you in implementing the requirements arising from the EU taxonomy. We will work with you to develop a tailored consulting approach.

Taxonomy Dashboard

For the first time, large publicly traded companies were required to disclose both the taxonomy readiness and taxonomy compliance of their business activities for the 2024 fiscal year, with respect to all activities defined in the Climate Act and the Environmental Act. We have aggregated the taxonomy data from DAX and MDAX companies into a taxonomy dashboard.
Make various comparisons by navigating through our taxonomy dashboard and applying the appropriate filters.