Between regulation and reality: Analyzing EU Taxonomy disclosures

The EU Taxonomy has emerged as a crucial framework in driving investments towards sustainable activities within the European Union's financial landscape. In this fourth edition of our EU Taxonomy disclosure survey, it was particularly interesting to investigate whether overall alignment percentages have increased, and whether companies’ disclosures are becoming more consistent in scope and content. Furthermore, we assessed whether the overall quality of the disclosures has changed with the transposition of the Corporate Sustainability Reporting Directive (CSRD) into national law, requiring that the company’s sustainability reports, including their Taxonomy disclosures, to be audited by an external assurance provider. Not only does the report look at the disclosures of all 275 sample companies and discuss overall developments, it also does a deep dive into sector-specific developments.

The third edition of our EU Taxonomy disclosure survey can be found here.

Executive summary

Reported activities in financial year 2024

For companies reporting eligibility greater than zero, the average eligible and aligned turnover were 43 percent and 20 percent, the average eligible and aligned CapEx were 48 percent and 23 percent and the average eligible and aligned OpEx were 45 percent and 25 percent. These numbers are remarkably similar to the last reporting period.

Scope and quality of disclosures

The correct usage of the KPI reporting templates has improved, but the qualitative information remains lacking.

Level of assurance

With obtaining limited assurance now mandatory in most European countries, results show a drastic increase compared to last year. Eighty-eight percent of all companies in our sample disclosed that they have commissioned an audit of their EU Taxonomy information, marking an increase of 49 percentage points from last year.

Consistency

A notable consistency is seen in the disclosures of financial year 2024 compared to financial year 2023, both when it comes to the reported cross-sector figures but also in the scope and quality of disclosures. The only remarkable difference that we see is in the level of assurance, which was to be expected with the CSRD becoming applicable this year.