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EU taxonomy in a nutshell

EU taxonomy is part of the EU Green Deal, which aims to promote the EU carbon neutrality targets by 2050. EU taxonomy requires companies to classify their environmentally sustainable activities and investments. The aim of the Taxonomy is to get the financial market to direct investments towards more environmentally sustainable solutions.

EU taxonomy raises uncertainty because the Taxonomy Regulation and its obligations as well as the classification system and reporting are constantly evolving. Therefore, possible effects on your business may change every year.

EU taxonomy – frequently asked questions


EU taxonomy is a classification system for sustainable economic activities. It lists economic activities that significantly contribute to the climate and environmental goals and their evaluation criteria. In practice, EU taxonomy is EU’s sustainability tool based on the Taxonomy Regulation. This allows companies to plan their activities in preparing for the green transition. In addition it also enables them to get financing when moving to a low-carbon and resource-efficient economy.

EU taxonomy is gradually developing, and it increases companies’ transparency as it requires companies to disclose their sustainability information. Sustainability reporting will be an integral part of companies’ annual reporting in the future, in addition to the traditional financial reporting.” says Terhi Valtonen, Senior sustainability consultant at Ecobio.

To whom?

In addition to financial market participants, the Taxonomy Regulation applies to large companies that annually publish a non-financial statement as part of their management report in accordance with the NFRD (Non-Financial Reporting Directive).

EU taxonomy is constantly developing. Because of this the classification system and reporting requirements will cover many other companies in the future. This will happen when the corporate sustainability reporting directive CSRD becomes applicable and replaces the NFRD.


Companies must identify which of their own economic activities can be classified as sustainable according to EU taxonomy. Companies must screen each activity in accordance with the do-no-significant-harm principle.

A company’s activities can only be sustainable if it does not harm other environmental goals or human rights at the same time. Companies must annually report on how much of their operations are in line with the EU taxonomy’s climate and environmental goals and also disclose the key performance indicators.

Large, listed companies already publish a non-financial statement, but the relevant sustainability information on company’s operations and its impacts can easily get lost in the pile of annually published reports, unless you know where to search for them. With the help of CSRD we will clearly talk about corporate sustainability reporting in the future.” says Terhi.


The Taxonomy Regulation and its technical criteria for climate goals have been applied since January 2022. Companies affected by this must annually disclose the share of sustainable activities in their turnover, capital expenditures and operating expenditures.

As of January 2023, companies must assess the sustainability of their economic activities. This must happen in accordance with the technical screening criteria for the EU taxonomy climate goals. The EU Commission will publish the remaining environmental objectives and their technical screening criteria in the fall of 2022.

Companies are advised to start preparing for the EU taxonomy classification and reporting of their sustainable activities in time, because it is a time-consuming process to finally be compliant with EU taxonomy requirements. Your company should also start preparing now.” says Terhi.


EU taxonomy is a companies’, investors’ and financiers’ sustainability tool, which strict technical screening criteria are based on science. It provides methods that can be used to assess how much of a company’s economic activities that have a significant impact on the climate and environmental goals of the EU Green Deal.

The taxonomy also provides common definitions that allow companies and investors to communicate credibly through their financial numbers about their green and sustainable operations and plans to transition to a low-carbon economy. A common language in sustainability matters is necessary to be able to compare the data and set sustainability goals.

EU taxonomy is not only the reporting obligation, but companies can use the taxonomy in integrating the the climate and environmental goals into company’s sustainability strategy and ESG goals.”

-Terhi Valtonen, Senior sustainability consultant, Ecobio

Additionally EU taxonomy serves as a basis for many actions of the EU sustainable finance strategy. For example green bonds, companies’ sustainable business and strategy targets, and reporting of material sustainability data.

Ask Ecobio experts – Contact us below:

    Technical Screening Criteria – environmental objectives

    Technical Screening Criteria – environmental objectives

    Recommendations on the technical screening criteria for the last four environmental objectives

    The Platform on Sustainable Finance recently released its report with recommendations to the EU Commission for the technical screening criteria for the remaining four environmental objectives defined under the EU Taxonomy Regulation (2020/852/EU). The report released on 30 March 2022 will provide the foundation for the upcoming environmental delegated act, although the EU Commission is not obliged to follow the recommendations. The Platform continues its work on the technical screening criteria for a selected set of activities and plans to release the criteria as a separate supplement in May 2022.

    Defined methods and criteria

    The current report details the methodological approach followed by the platform when selecting relevant and prioritised activities for which technical screening criteria should be developed – and formulating the criteria. The report consists of two parts.

    Part A explains the approach of the platform and the methodology followed. It defines the ambition level for each environmental objective and clarifies what a substantial contribution means for each environmental objective. It also explains the consultation process and provides recommendations and reflections for future work.

    Part B lists all the defined activities according to sector and defines the technical screening criteria and the rationale behind the selection of criteria. Note that the EU Commission is not required to follow these requirements.

    The publication of the upcoming delegated act based on these recommendations is expected during Autumn 2022 and to apply from 1.1.2023. According to the Disclosures Delegated Act (2021/2178), companies need to report alignment with the new criteria 12 months after application.

    The report from the Platform follows the recently released reports on the environmental transition taxonomy (29 March 2022) and the social taxonomy (28 February 2022).

    Ecobio’s consulting services for sustainable finance

    Ecobio can help you with interpreting the EU Taxonomy criteria and classify and report taxonomy-related information.


    If you have any questions about our taxonomy services, please contact us:

      Ecobio Whitepaper: EU Taxonomy Classification and Reporting in 2022 – Five Steps for Compliance

      Download Ecobio's Free Whitepaper Five Steps to Comply with the Taxonomy Regulation


      EU Taxonomy classification and reporting in 2023 – Eight steps to compliance whitepaper available now

      The new whitepaper aims to provide implementation guidance on EU Taxonomy Classification and Reporting requirements valid from 2023. 

      EU Taxonomy classification and reporting in 2023 – Eight steps to compliance whitepaper

      This whitepaper aims to provide implementation guidance on EU Taxonomy Classification and Reporting requirements valid from 2023. The document deals with the actions needed by companies in the non-financial sector. Read the latest whitepaper to learn more about:

      • What is the EU Taxonomy Regulation?
      •  Which companies are required to act now?
      •  Eight steps for compliant EU Taxonomy classification and reporting from 2023

      Click for more here.

      In 2022, the Taxonomy classification and reporting requirements are limited. Non-financial undertakings are required to disclose the share of their turnover, capital, and operational expenditure associated with environmentally sustainable economic activities. Our new whitepaper contains the five steps for compliant EU Taxonomy classification and reporting in 2022.

      The whitepaper provides implementation guidance on EU Taxonomy Classification and Reporting 2022. The document deals with the actions needed in non-financial undertakings. The five-step work pipeline in the whitepaper will help you fulfil the actual Taxonomy requirements in your entity.

      2022 whitepaper covered the topics of:

      • What the EU’s Taxonomy Regulation implicates
      • How your company is affected by Eu taxonomy
      • What the current timeline for the Taxonomy looks like
      • Which requirements apply to your company
      • Five most important steps to meet the Taxonomy Requirements

      This whitepaper is no longer available for download.

      EU Taxonomy classification and reporting in 2022

      The EU Taxonomy Regulation and related statutes direct investments toward sustainable economic activities. They formulate a robust and science-based framework for companies and investors that provides environmental criteria for determining which economic activities substantially contribute to the EU Green Deal objectives.

      The EU Taxonomy Regulation (2020/852/EU) sets technical screening criteria to determine if an economic activity can be considered sustainable for six environmental objectives. Currently, the screening criteria are available for the two objectives: climate change mitigation and climate change adaptation. The screening criteria for the remaining objectives will be published in spring 2022.

      Read more about our EU Taxonomy digital solution here and our sustainable finance consultancy services here.