What does the EU taxonomy mean?
The EU taxonomy is part of the European Commission's action plan on financing sustainable growth, with encouraging development in line with the UN Sustainable Development Goals and the Paris Agreement. The taxonomy is a tool to steer private investments to sustainable companies and defines what is green business activities.
If your operations are affected by the regulation, you need to disclose how large a proportion of the operation’s turnover for the fiscal year that is sustainable under the taxonomy criterias. The taxonomy’s KPIs in the Sustainability Reporting provide an indication of how green your company is and how much you are investing in transforming your operations. The KPIs are comparable between companies within the same sector and there is also a requirement that a third party reviews the company’s reports. The EU taxonomy aims to increase transparency and prevent greenwashing.