European Union
New non-climate environmental taxonomy & expansion of the climate taxonomy
From January 1, 2024
- The green taxonomy is extended by:
- incorporating new activities into the climate taxonomy —Delegated Regulation (EU) 2023/2485—, and
- providing a new classification of activities according to their contribution to non-climate environmental objectives —Delegated Regulation (EU) 2023/2486—:
- Sustainable use and protection of water and marine resources.
- Transition to a circular economy.
- Pollution prevention and control.
- Protection and restoration of biodiversity and ecosystems.
- Undertakings are subject to the new disclosure requirements:
- Non-financial undertakings
- From January 1 to December 31, 2024, they are required to disclose the proportion of their activities that are taxonomy-eligible.
- From January 1, 2025, they are required to disclose the proportion of their activities that are taxonomy-aligned.
- Financial undertakings
- From January 1, 2024, to December 31, 2025, they are required to disclose the proportion of their assets covered by the exposures related to taxonomy-eligible activities.
- From January 1, 2026, they will have to report KPIs as appropriate in each case to reflect how their activity aligns with the new taxonomy.
The expansion of the green taxonomy is particularly relevant for companies that need to produce sustainability reports —see Legal Flash | Corporate Sustainability Information: CSRD Directive— as well as market participants who offer financial products and environmentally sustainable bond issuers who need to explain the use of proceeds —see Post | Green Bond Regulation has been published—.