Is your company classified as an environmentally sustainable activity as set up by the Taxonomy Regulation? Please select the condition(s) your economic activity aims at meeting.

  • Radia Guira

In order to be qualified as environmentally sustainable, your economic activity has to meet at least 4 overaching conditions.
If you have selected at least one of the objectives, please indicate the targets (KPIs) and the budget allocated in the comments section.

Cette question cherche à comprendre si votre entreprise est classifiée comme une activité durable sur le plan environnemental, selon les critères établis par la Réglementation Taxonomique. Cette norme réglementaire vise à encourager les investissements dans les activités économiques qui contribuent à une économie environnementale durable en classant les activités qui sont bénéfiques pour l’environnement.

Il vous est demandé de sélectionner les critères que votre activité économique vise à satisfaire. Cela signifie que vous devez identifier les objectifs environnementaux spécifiques que votre entreprise cherche à atteindre, tels qu’ils sont définis par la Réglementation Taxonomique.

Exemple de réponse : « Our company is classified as an environmentally sustainable activity as per the Taxonomy Regulation. We aim at meeting the following conditions: climate change mitigation, sustainable use and protection of water and marine resources. »

Environmental, Social, and Governance (ESG) criteria are increasingly important in the business landscape. With climate change and sustainability concerns at the forefront of public attention, assessing your company’s environmental impact is not just about corporate responsibility—it’s also about financial viability and regulatory compliance. The EU Taxonomy for sustainable activities, a classification system established to guide investment towards environmentally sustainable activities, is one of the legal frameworks companies must navigate.

Understanding the EU Taxonomy Regulation

The EU Taxonomy is a complex framework but understanding it is the first step to ensuring your company is aligned with its requirements. Essentially, it categorizes economic activities that can be considered environmentally sustainable, providing a common language for investors and companies alike. The Taxonomy Regulation is part of the European Green Deal’s strategy to finance sustainable growth and mitigate climate change. To be classified as environmentally sustainable, an activity must contribute substantially to one or more environmental objectives and do no significant harm (DNSH) to any of the others. It must also meet minimum safeguarding standards, such as compliance with labor and human rights laws. For more detailed information, refer to the official sources at EU Taxonomy for sustainable activities and EU Sustainable Finance Taxonomy.

Key Environmental Objectives to Consider

Your company’s activities are assessed against six environmental objectives defined by the Taxonomy Regulation:

  1. Climate change mitigation
  2. Climate change adaptation
  3. Sustainable use and protection of water and marine resources
  4. Transition to a circular economy, waste prevention, and recycling
  5. Pollution prevention and control
  6. Protection and restoration of biodiversity and ecosystems

A critical first step to determining if your company qualifies is to assess which of these objectives your activities contribute to. It’s not enough to have good intentions; your company must have concrete measures in place that can demonstrate a clear contribution to at least one of these goals without negatively impacting the others. Consider each objective carefully and gather evidence of your contribution—this could include emission reduction targets, energy efficiency measures, sustainable water management practices, and policies to protect biodiversity.

Compliance and Disclosure Obligations

Once you’ve determined how your company’s activities align with the EU Taxonomy’s environmental objectives, you must understand the compliance and disclosure obligations. The EU’s increased emphasis on transparency means that large public-interest entities with more than 500 employees are required to disclose information on how and to what extent their activities are associated with those considered environmentally sustainable in the Taxonomy. This process is detailed and requires thorough documentation. For further insights into these obligations, the resource at new EU ESG disclosure obligations for large companies is invaluable.

Your company will have to report the proportion of their turnover, capital expenditure (CapEx), and operational expenditure (OpEx) related to environmentally sustainable activities. This level of detail helps stakeholders understand the extent of your company’s sustainability efforts and can influence investment decisions.

It’s also important to note that the Taxonomy Regulation is dynamic. It will expand and evolve as new legislative acts are adopted and scientific knowledge progresses. Therefore, continuous monitoring of regulatory updates is crucial.

In summary, determining whether your company is classified as conducting an environmentally sustainable activity under the EU Taxonomy Regulation involves a deep dive into your company’s operations and their impact on the environment. It requires a holistic approach to assess contributions to the Taxonomy’s environmental objectives, as well as meticulous reporting to satisfy compliance and disclosure requirements. With the EU firmly committed to leading the global charge on sustainable finance, understanding and aligning with the Taxonomy Regulation is not only a legal obligation but also a strategic business move towards future-proofing your company in a rapidly evolving economic and environmental landscape.

If you’re looking to calculate your company’s ESG score or need assistance with completing questionnaires related to the Taxonomy Regulation, it’s important to approach the process methodically. Gather your data, understand the legal frameworks, and if necessary, seek expert advice to ensure your company’s activities meet the relevant criteria and are reported accurately. By doing so, you’ll not only comply with current regulations but also demonstrate your commitment to a sustainable future, which can significantly enhance your company’s reputation and stakeholder confidence.