EU Taxonomy: Sustainable Economy and Reporting
The EU Taxonomy Regulation is a European set of rules that promotes a sustainable economy. It provides a framework and criteria for the standardised classification of ‘green’ or ‘sustainable’ economic activities. This is intended to help ensure that investments are made in business activities that meet the environmental challenges of our time.
Since 1 January 2022, large capital market-oriented companies in the EU have had to provide information on the taxonomy KPIs in their non-financial statement. The introduction of the CSRD will further expand the group of companies required to report from 2025.
The EU Taxonomy Regulation is also relevant for Swiss companies, either because they are subject to the disclosure obligations under the CSRD or because the taxonomy KPIs are requested by investors.
Objectives of the EU taxonomy
The EU taxonomy is a classification system that defines which economic activities are considered environmentally sustainable. It comprises six environmental objectives:
- Climate protection
- Adaptation to climate change
- Sustainable use and protection of water and
- Marine resources
- Transition to a circular economy
- Prevention and reduction of environmental pollution
- Protection and restoration of biodiversity and ecosystems
The taxonomy is intended to avoid greenwashing and create transparency with regard to the sustainability of financial products. It helps investors and companies to make informed decisions about environmentally friendly economic activities.
What do companies need to do for compliant EU taxonomy disclosure?
Companies must identify taxonomy-eligible economic activities and then assess their taxonomy compliance. More than 100 activities are defined in the taxonomy, but these still only represent a small part of the overall economy. Technical criteria for environmentally sustainable economic activity must then be checked for the activities:
- The economic activity makes a significant contribution to the realisation of one or more of the six named environmental objectives.
- The activity does not affect any of the other environmental objectives (Do No Significant Harm).
- The activity is carried out in compliance with minimum social standards (minimum safeguards).
In a final step, companies must calculate the relevant indicators and publish them as part of their non-financial reporting:
- EU taxonomy compliant share of sales
- EU taxonomy compliant and compliant capital expenditure (CapEx)
- EU taxonomy-capable and compliant operating expenses (OpEx)
Support from ecos
We support you with the implementation of the EU taxonomy by:
- Introduction to the EU taxonomy and the technical evaluation criteria
- Classify your activities according to the six environmental objectives to determine taxonomy capability
- Evaluation of taxonomy conformity based on the technical evaluation criteria (Substantial Contribution to one of the environmental objectives, Do No Significant Harm to the other environmental objectives and Compliance with minimum social standards (Minimum Safeguards))
- Support in the calculation of taxonomy KPIs and creation of audit-proof documentation
- Support in the preparation of the text in the sustainability report and coordination with the auditors
Omnibus adaptations and CSRD
On 26 February 2025, the European Commission presented the ‘Omnibus’ package, which, among other things, proposes simplifications to the EU taxonomy.
Significant changes in relation to the EU taxonomy include
- Scope: Full reporting only for companies with > 1,000 employees and turnover > EUR 450 million
- Postponement: The next wave of companies will only report for FY27, analogous to the CSRD
- Voluntary reporting: Companies subject to CSRD with > 1,000 employees and < EUR 450 million net sales can voluntarily disclose their sales and CapEx KPIs (OpEx KPI can be omitted), and also report partial compliance
- Materiality: Materiality concept for companies that have < 10% taxonomy-eligible activities
- Simplification: Reduction of templates for EU taxonomy reporting and simplification of the ‘do no significant harm’ test
