On Friday 4 July, the European Commission submitted a delegated act aimed at simplifying the obligations relating to the application of the European Union taxonomy, a classification system used to determine whether economic activities are environmentally sustainable.
Announced in February as part of the regulatory simplification work (see EUROPE 13588/4), this initiative will reduce reporting requirements for both financial and non-financial companies.
Financial and non-financial companies will thus be exempted from the assessment of eligibility and alignment with the taxonomy for their economic activities that are not considered material (introduction of the ‘materiality’ principle). For non-financial companies, the activities will not be significant if they represent less than 10% of their total revenues, capital expenditure (CapEx) or operating expenditure (OpEx).
For financial companies, the key performance indicators (KPIs) - such as the ‘green asset ratio’ (GAR) for banks - are simplified, and these companies will not be able to communicate the detailed key performance indicators of the taxonomy for two years.
In addition, the criteria relating to the ‘do no significant harm’ environmental principle for the prevention and control of pollution by chemicals will be simplified.
Finally, reporting documents will be streamlined.
If there is no objection - either from the European Parliament or the Council of the EU - the delegated act will apply from January 2026 for the 2025 financial year.
See the Commission’s delegated act: https://aeur.eu/f/hpv ; and its annex: https://aeur.eu/f/hpw (Original version in French by Mathieu Bion)