Initial situation EU taxonomy
As part of its climate policy positioning and as a result of the Paris Climate Agreement, the European Commission presented the European Green Deal in December 2019. With the Green Deal, the Commission proclaims the goal of reducing net emissions of greenhouse gases in the European Union to zero by 2050 and thus becoming climate neutral.
To support the alignment and financing of the Green Deal, financial flows are to be diverted into "environmentally sustainable" activities. For this purpose, the EU Sustainable Finance Taxonomy (hereafter: EU Taxonomy) was developed, a classification system to clearly define "environmentally sustainable" business activities.
The new reporting requirements associated with the EU taxonomy are likely to significantly increase the informative value of non-financial reporting. This works by establishing a link between financial and non-financial topics for the first time. They will be relevant for the capital market to fulfill their own reporting obligations. Conformity with the EU taxonomy therefore requires early and intensive consideration of these topics in the reporting companies.
The first reporting obligation takes effect early after the adoption of the Taxonomy Regulation in June 2020 as of 1 January 2022. Thus, you have to take care of the implementation of the EU Taxonomy in a timely manner.
The 6 environmental objectives of the EU taxonomy
The 3 EU taxonomy criteria for sustainable economic activity
"As the economist Peter Drucker said: "If you can't measure it, you can't manage it!
It is the same with the EU taxonomy. Only those who know how sustainably the company operates can also change and optimise this."
Frequently Asked Questions (FAQs) on the EU Taxonomy
- Companies (>500 employees) that fall under non-financial reporting
- Financial institutions + providers Occupational pensions selling their products in the EU
- European institutions dealing with the classification of sustainable financial products
According to the EU taxonomy, the following parts of economic activity are to be disclosed in conformity with the EU taxonomy:
- Turnover (revenue from the sale of products)
- CapEx (capital expenditure on longer-term fixed assets, such as machinery)
- OpEx (costs of operating expenses, such as raw materials and energy costs)
The EU taxonomy is a content of non-financial reporting. Thus, the EU taxonomy reporting can be a:
- Part of the Annual Report
- or a single sustainability report
- ESMA(European Securities& Markets Authority) has provided a proposal for the presentation of the reporting in its final report "Advise on Article 8 of the Taxonomy Regulation".
- The proposal shows uniform reporting for turnover, OpEx and CapEx.
- The first dimension (rows) is always divided into "taxonomy-aligned" and "not taxonomy-aligned" economic activities.
- The second dimension (column) divides into:
- Ratio turnover, OpEx, CapEx in %
- Fulfilment of the 6 environmental targets of the EU taxonomy in %.
- DNSH criterion(Do No Significant Harm): Documentation of the expression in Yes/No
- and a comparison with the previous year
- In theshort term, the EU taxonomy is only relevant for Swiss companies if they generate value added within the EU.
- In the long term, however, this may change. In its report " Sustainability in the Swiss Financial Sector", the Swiss Federal Council writes that it sees the topic of sustainable finance as very relevant for the Swiss financial market. Although the Federal Council does not see a 1:1 implementation of the EU taxonomy, it would like to follow it.
- This provides an indication that regulatory intervention is also to be expected in Switzerland in the long term. It is important to react strategically and to deal with the issue of the EU taxonomy in a timely manner, even as a Swiss company.
Successful implementation of the EU taxonomy in 6 steps
EU taxonomy implementation
We estimate the effort for this project at 30 external consultant days. The departments of accounting, controlling and sustainability should also have the resources to conduct the workshops or meetings on a selective basis.
The auditing company cooperating with s-peers is available on call with 3 to 5 person days.
