The taxonomy is a system developed by the EU to classify what a sustainable economic activity is. The backdrop for the introduction is “The European Green Deal” from 2020, which is the EU’s action plan to achieve a carbon-neutral European region by 2050. The Taxonomy Regulation forms the basis for the classification system.
The Taxonomy Regulation and associated delegated acts determine which economic activities are covered by the framework and can thus be defined as sustainable. For businesses, a first step in the work of reporting on the EU Taxonomy will be to identify which of their economic activities are covered by the framework.
Once the company has defined which activities are covered, the next step will be to assess whether they meet the taxonomy’s criteria and are thus classified as sustainable. Activities that are not covered by the taxonomy should be reported as “not covered by the taxonomy.” It is important to note that the EU Taxonomy is a dynamic framework, and therefore new economic activities are constantly being included.
