Skip to main content
Contact
Submit RFP

      The EU taxonomy imposes sustainability reporting obligations on companies. Since 1 January 2022, large capital market-oriented companies with more than 500 employees that are not financial companies* must disclose in their non-financial statement the proportion of the key figures revenue, capital expenditure and operating expenditure that is associated with environmentally sustainable economic activities as defined by the EU taxonomy. In addition, further explanatory and substantiating statements on the three key figures are expected, such as explanations on the determination of taxonomy-compliant activities and the calculation methodology of the three key figures. From 2025, the group of companies that must fulfil the requirements of the EU taxonomy will be expanded to include companies that will be obliged to report on sustainability for the first time due to the Corporate Sustainability Reporting Directive (CSRD).

      The EU Taxonomy is a measure set out in the EU Sustainable Finance Action Plan, which was codified in Regulation 2020/852 (Taxonomy Regulation). The aim of the action plan is to channel capital flows into environmentally sustainable activities. The prerequisites for this include a standardised understanding of what is considered an "environmentally sustainable economic activity" and the creation of verifiable criteria that enable an activity to be classified as environmentally sustainable. The EU taxonomy creates these conditions.

       

      * Further special requirements apply to financial companies.

      auto_stories

      Analysis and classification of current developments in Sustainability Reporting 2024.
      Download now

      Ecologically sustainable economic activities and environmental goals

      The Taxonomy Regulation defines the criteria for environmentally sustainable economic activities:

      EU taxonomy - 6 objectives

      The following six environmental objectives are listed in the Taxonomy Regulation:

      EU Taxonomie - 6 Ziele

      These criteria are concretised by further delegated acts and references to other EU regulations and EU directives.

      Identify taxonomy-compliant economic activities

      In order to calculate the required key figures (revenue, investments, operating expenses), the company's taxonomy-compliant economic activities must first be determined, i.e. the company's activities specified in the delegated acts (Climate Delegated Act and Environmental Delegated Act) must be identified. It must then be checked whether these activities also fulfil the technical assessment criteria for taxonomy-compliant activities (substantial contribution to one of the environmental objectives, no impairment of one of the other environmental objectives, compliance with the minimum level of protection). As a result, the taxonomy-compliant activities are determined, which are included in the calculation of the financial indicators, i.e. the share of revenue, capital expenditure and operating expenditure.

      The increasingly strong link between financial and non-financial information in corporate reporting becomes clear here: while taxonomy-compliant economic activities are often determined in the sustainability departments, the basis for calculating the key figures can be found in the company's accounting department.

      What to do now?

      As a first step, affected companies should analyse their economic activities with regard to their taxonomy capability and taxonomy conformity based on the EU requirements. In addition, further dimensions such as systems, processes and the control landscape must be taken into account in the analysis for the subsequent reporting of key financial figures.

      Efficient reporting and ensuring the desired assurance requires a holistic concept for implementation involving all key stakeholders.

      We support you with our extensive experience and knowledge in implementing the new requirements.

      Ready to talk? Contact us.
      The EU taxonomy will sharpen ecological awareness in companies. At the same time, it will mean that sustainability reporting and financial reporting will merge and many companies will have to adapt their internal processes accordingly.
      Johann Schnabel
      Johann Schnabel

      Partner, Audit, Head of Accounting & Process Advisory

      KPMG AG Wirtschaftsprüfungsgesellschaft

      More KPMG insights for you

      Your contacts