On 1 January 2022, the first part of the European Taxonomy Regulation came into force. This Regulation sets out the sustainable economic activities to be reported on by businesses, known as the EU Taxonomy. Investments and activities must meet certain criteria to qualify as ‘green’. This will promote transparency, combat ‘greenwashing’ and steer capital towards sustainable investments. But what exactly is the EU Taxonomy, and what businesses are required to report on it and when?
The EU Taxonomy already affects PIEs having in excess of 500 employees and financial institutions that currently already have to comply with the additional requirements of the Taxonomy Regulation. The Taxonomy Regulation also has far-reaching implications for large undertakings that are not yet required at present to report non-financial information and EU Taxonomy matters, but will be required to do so in the near future.
Impact for financial year 2021
For the financial year 2021, large PIEs are only required to disclose Taxonomy eligible and Taxonomy non-eligible economic activities (eligibility). This means that economic activities described in the Delegated Act must be disclosed, regardless of whether they meet one or all of the technical screening criteria.
Start implementation well in advance
The importance of starting the EU Taxonomy implementation process well in advance cannot be stressed enough. The attached fact sheet explains why this is so important. In addition, it discusses the background to the EU Taxonomy, its consequences for your business and the steps your business can take today to ensure relevant and reliable implementation and reporting.
More information
We will be happy to talk you through the implications of the EU Taxonomy for your business and the steps you can take to be ready for this sustainable activities classification system. If you have any questions about the Taxonomy Regulation or would like assistance in implementing it within your organisation, please do not hesitate to contact us.