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Three steps for EU Taxonomy Reporting – Deadline coming soon

Three steps for EU Taxonomy Reporting – Deadline coming soon

Are you ready to report EU Taxonomy eligibility as a non-financial entity? In the EU, this year will be the first EU Taxonomy reporting period to disclose in 2022 for non-financial listed companies with over 500 employees on average during the reporting period (Prop. 2021/22:11).

During the first year, non-financial companies shall disclose the proportion of total turnover, total CapEx and total OpEx that consist of environmentally sustainable economic activities eligible with the EU Taxonomy. I.e., the activities within one of the defined categories for which the Taxonomy regulation provides sustainability criteria. Reporting on eligibility already in 2022 will ensure that companies required to report complete KPIs on Taxonomy alignment from 2023 will be better prepared for the work of classifying and defining the financial reporting level necessary to comply with the Taxonomy regulation.

Three steps for EU Taxonomy Reporting

The following three steps guides reporting for the first year:

Step 1. Economic activity. Identify each potential economic activity, including a subset of transitional and enabling economic activities

Step 2. Eligibility. Assess eligibility by comparing your economic activity with the Taxonomy defined activity category descriptions and NACE codes.

Step 3. Reporting KPIs. Report eligibility as the proportion of total turnover, total CapEx and total OpEx, including relevant contextual information on how eligibility has been determined and implemented in the necessary calculations.

The turnover KPI represents the proportion of the net turnover derived from products or services that are taxonomy eligible. The turnover KPI gives a static view of the company’s contribution to environmental goals.

The CapEx KPI represents the proportion of the capital expenditure of an activity that is either already taxonomy-aligned or is part of a credible plan to extend or reach taxonomy alignment. CapEx provides a dynamic and forward-looking view of companies’ plans to transform their business activities.

The OpEx KPI represents the proportion of the operating expenditure associated with taxonomy-aligned activities or the CapEx plan. The operating expenditure covers direct non-capitalised costs relating to research and development, renovation measures, short-term lease, maintenance, and other direct expenditures relating to the day-to-day servicing of property, plant and equipment assets that are necessary to ensure continued and effective use of such assets.

The European Council will make a final decision about the schedule on the 8th of December, 2021.

Digitalise your EU Taxonomy work process

With the deadline for the first reporting requirements regarding EU Taxonomy is approaching, it is beneficial to already from the beginning take advantage of the efficiency offered by digitalisation. Ecobio Manager is the world’s first comprehensive taxonomy solution, including a smooth classification process and up-to-date legal databases, as well as an environmental risk assessment protocol. So far, there has been no service with similar coverage in the global market.

With Ecobio Manager, you can turn the complex set of EU Taxonomy reporting requirements into a smooth and straightforward digital work process for your team. The digital solution includes a demanding entity of requirements always available and effectively managed. Our easy and comprehensive tool contains everything you need to meet the requirements of EU Taxonomy classification and reporting

Get expert advice and join our presentation

Presentation of our digital solution

Do you need help with EU Taxonomy classification and reporting? Join our presentation of the world’s first comprehensive digital solution for the EU Taxonomy! During our 30 min presentation, we present our easy and comprehensive tool containing all you need to meet the EU Taxonomy classification and reporting requirements.

Register here!

Expert advice and personal demo account

Do you have questions regarding EU Taxonomy and need advisory? Do you want a presentation of our digital solution regarding EU Taxonomy? Contact our EU Taxonomy expert Katrine Hoset to get expert advice and an in-depth presentation of the comprehensive solution. Do not hesitate to ask our expert about a personal demo account to try out our platform.

Please get in touch with us

Katrine Hoset

Account Manager, Senior Consultant

katrine.hoset@ecobio.fi

+358 (0)20 756 2306

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

Join our presentation of the world’s first comprehensive digital solution for the EU Taxonomy!

Join our presentation of the world’s first comprehensive digital solution for the EU Taxonomy!

Do you need help with EU Taxonomy classification and reporting? Join our presentation of the world’s first comprehensive digital solution for the EU Taxonomy!

Register here

Join us for a free 30 min presentation and we will show how the new section in our digital solution, Ecobio Manager, will help you to turn the complex set of EU Taxonomy requirements into a smooth and straightforward work process for your team.

With the requirements for the EU Taxonomy soon coming into effect, it is beneficial to have an innovative, efficient, and in-depth solution at hand, to get the process toward compliance started.

Join our presentation to learn:

  • How you can benefit from digitalization during classification and reporting
  • How our easy-to-use and comprehensive digital solution works
  • How to create a smooth and straightforward work process for your taxonomy team

During the event, you are also able to ask questions from our experts. Please register using your business email address.

The free online presentations are held on 26.10 (13.00-13.30, UTC+3), 16.11 (9.30-10.00, UTC+2) and 7.12 (13.00-13.30, UTC+2).

You are warmly welcome!

Read more and register here.

Are you unsure whether you are in or out of the EU Taxonomy classification and reporting requirements?

Take our EU taxonomy quiz and determine whether your company is affected by the EU Taxonomy regulation. Take the quiz here.

Our recorded webinars can be found on our homepage

In our webinar library, you can find our recorded webinars that you can watch whenever you find most suitable for you! You can find our webinar library here.

Ecobio launched the world’s first comprehensive digital solution to comply with the EU Taxonomy Regulation

Ecobio launched the world's first comprehensive digital solution to comply with the EU Taxonomy Regulation
The Ecobio team at the launch event 29.9. From left: Taru Halla, Emma Björkqvist, Katrine Hoset, Sanna Perkiö & Evelina Meski

The EU environmental classification legislation for sustainable finance, in short, EU Taxonomy Regulation, is a large-scale, regulatory-based framework that requires companies to define environmentally sustainable economic activities. The regulation is an EU tool to steer the economy towards sustainable development. Companies will have to meet the requirements gradually from the beginning of 2022.

The EU Taxonomy Regulation obliges large, listed companies and companies operating in the financial markets to classify, assess and disclose their economic activities in accordance with sustainable development criteria. In the future, the Taxonomy Regulation will apply to a broader range of business entities.

Companies are now preparing to comply with the requirements of the EU Taxonomy Regulation. To date, little assistance has been available for companies to assess the conformity of a large-scale classification system and to report data.

Ecobio Manager aims to solve the EU Taxonomy challenge of over ten thousand companies

Today, Wednesday, September 29, 2021, Ecobio announced the world’s first comprehensive and easy-to-use digital solution to meet the requirements of the EU Taxonomy Regulation. The solution is implemented as part of the Ecobio Manager SaaS service. Ecobio Manager is an environmental compliance tool for business operations, products, and subcontractors as a cloud service.

– Ecobio Manager is the world’s first comprehensive taxonomy solution including a smooth classification process and up-to-date legal databases, as well as an environmental risk assessment protocol. So far, there has been no service with similar coverage in the global market, said Sanna Perkiö, D.Sc., founder, and the Head of Development of Ecobio.

The EU Commission has created a complex system, which may result in companies getting lost in the requirement jungle without expert help and a systematic way of working.

– We offer over ten thousand companies in the EU an easy and competent digital solution to meet the requirements of EU Taxonomy. Feedback from listed companies and the financial industry has been both enthusiastic and relieved.

From the beginning, companies should take advantage of the efficiency offered by digitalization, Perkiö suggested.

– The first requirements of the taxonomy must be reported as early as next spring. We expect wide interest and customers from all over Europe.

Read more about our digital solution for EU taxonomy here.

You can find all of our recorded webinars from our webinar library here.

The EU’s Taxonomy and KPIs

The EU's Taxonomy and KPIs

The European Commission has published a draft version of a Delegated Act to supplement article 8 in the Taxonomy Regulation (EU) 2020/852. This supplementation specifies the content and presentation of the information concerning environmentally sustainable economic activities and specifying the methodology to comply with that disclosure obligation.

EU strives to channel capital towards sustainable investment

One of the key objectives of the European Commission’s action plan on financing sustainable growth is to reorient capital flows towards sustainable investment and ensure market transparency. To achieve this, EU Taxonomy (EU 2020/852) was created, a classification system for sustainable activities. The EU Taxonomy is a robust and science-based tool for companies and investors that provides criteria for determining which economic activities substantially contributes to the Green Deal objectives.

Common KPIs to help understand companies’ sustainability

The drafted Delegated Act further specifies the content, methodology, and presentation of the information in the Taxonomy Regulation. The Delegated Act allows companies to translate the technical screening criteria of the Climate Delegated Act (and in the future Environmental Delegated Act) into quantitative economic performance indicators, KPIs, which will be publicly disclosed. This helps investors and the public to better understand the companies’ impact towards sustainability trough the annual publication of their KPIs. This will increase transparency on the market and help prevent greenwashing.

The Taxonomy Regulation and the published Delegated act complement the NFRD (Non-Financial Reporting-Directive) and SFDR (Sustainable Finance Disclosure Regulation) by providing a common reference point for reporting the degree of alignment with sustainable activities.

Market fields receive separate instructions for reporting

The Taxonomy-related disclosures will create an entire ecosystem of sustainable finance tools, including standards, labels, and access to a coherent and relevant set of sustainability data. These on the other hand are necessary to channel capital towards the investments needed to reach the EU’s sustainability goals.

The Delegated Act includes separate instructions for different market fields regarding sustainable reporting with KPIs. These fields are non-financial undertakings, asset managers, credit institutions, investment firms, and insurance and reinsurance undertakings.

The drafted delegated act was open for feedback until 2 June. A lot of the feedback highlights the need to simplify and clarify the KPIs that should be reported, inconsistencies between reporting deadlines and availability of data, and a potential need for a longer transition period before reporting starts. Commentaries have also commented on the need to better align the reporting scope and application timelines in this delegated act with the CSRD (Corporate Sustainability Reporting Directive, the proposed amendment of the NFRD).

The challenge of reaching compliance with the Taxonomy Regulation

Many of the respondents that commented on the Commission’s publishment mentioned the challenge of collecting Taxonomy compliance data within companies and assigning this data to specific business lines. Ecobio’s sustainability experts familiar with the Taxonomy requirements and experts in EHS requirements will help your company meet the expectations of the Taxonomy Regulation. Ecobio’s sustainable finance services helps you to identify your sustainable economic activities and report your alignment with the Taxonomy. Read more about our services regarding Sustainable Finance here!

With our Ecobio Manager legislation compliance tool, companies can assess compliance with the do-no-significant-harm requirements and minimum safeguards as well as follow up on relevant legislation development. Read more about Ecobio Manager here!

Do you want to hear more? Kindly contact us:

Katrine Hoset

Katrine Hoset

Account Manager, Senior Consultant

katrine.hoset@ecobio.fi

+358 (0)20 756 2306

Five steps to comply with the Taxonomy Regulation – Whitepaper

Our comprehensive and concise free whitepaper helps your company reach and maintain compliance with EU’s Taxonomy Regulation in a constantly moving situation.

Do you want to know what the EU’s Taxonomy Regulation implicates and who are affected by it? Are you curious about the current timeline and what requirements apply to your company? These are just some of the questions our whitepaper answers as well as presenting the five steps to meet the requirements!

You can download our whitepaper here!


Text: Emma Björkqvist

Picture: Shutterstock

Potential changes to REACH and CLP-regulations – Provide your feedback!

The European Commission has published two of its Inception Impact Assessments on potential changes to the REACH and CLP-regulations within the scope of the EU Chemicals Strategy for Sustainability.

The European Commission has published two of its Inception Impact Assessments on potential changes to the REACH and CLP-regulations within the scope of the EU Chemicals Strategy for Sustainability. You can find these Inception Impact Assessments and provide your feedback on them by the first of June 2021 by following the links below.

Have your say and affect the changes!

As examples the following are considered by the Commission:

  • Increasing information requirements on hazards, safe use, and environmental footprint (REACH)
  • Registration of certain polymers (REACH)
  • Introduction of electronic safety data sheets to improve information flow (REACH)
  • Integrating the REACH authorization and restriction systems into one (REACH)
  • Introducing new hazard classes e.g. endocrine disruptions (CLP)
  • Clarifying classification obligations for mixtures and some complex substances (CLP)

You can comment the Inception Impact Assessments from the links below.

Read more about our services related to REACH!

We will register your substance in accordance with the European Union REACH Regulation and take care of challenging product requirements with professional aptitude. Read more about our services here!


Picture: Shutterstock

New in Sustainable Finance

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Sustainability runs capital. During the last 10 years the capital in sustainable indexes has doubled. During the last year sustainability indexes that concentrate on environmental (E), social (S) and governance (G) have had higher returns than their non-sustainable competitors both on the European and North American market. As there are several indexes it can be difficult for investors to understand what they contain and how to compare them. The European Union strives to make the indexes more comparable and transparent by creating new directives and therefor creating a stronger and cleaner economy.

EU leads capital towards sustainability

The new laws concerning sustainable finance by the European Union leads towards sustainable investing by a creation of clearer definition of tools and obligations of sustainability reporting and -valuation. To support this, the European Union has published the EU Taxonomy Regulation for sustainable development. The Taxonomy Regulation contains harmonic criteria that define whether the economic activity is sustainable from the nature’s perspective. The classification contains e.g., climate change, water resources, and circular economy. The creation of the taxonomy regulation unites sustainable reporting which makes it easier for investors and other financial actors to make their investment decisions. The classification is new for companies and it is profitable to start preparing for them already now.

Additionally, the European Commission will approve a directive in June 2021 that specifies the reporting among non-financial information. The directive defines how and how widely companies must report according to the above-mentioned Taxonomy Regulation.

The first company- and investment reports in accordance with the new Taxonomy Regulation must be published in the beginning of 2022 about the financial information from 2021.

You might be interested in our webinar recording“New in Sustainable Finance: How to apply EU’s taxonomy regulation and reporting requirements” 

Are you interested in sustainable finance? Are you familiar with the new classifications and reporting requirements in sustainability by EU? Have you wondered how you should prepare to meet the obligations?

Welcome to hear more about sustainable finance, the new obligations and how one should prepare to develop the reports. Our expert will go through EU’s Taxonomy Regulation in our webinar recording.

Read more and watch the webinar here!


Text: Sanna Perkiö

Photo: Shutterstock

Sources:

Kauppalehti 5.1.2021. ”Vastuullisuus sai vauhtia koronasta”

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-sustainable-activities_en

The European Commission has approved the carcinogenicity classification of titanium dioxide dust

Nanomateriaalit kemikaalit laboratorio tutkija

The European Commission approved the 14th technical adaptation of the CLP Regulation. It includes the classification of titanium dioxide as a Category 2 inhalation carcinogen. The substance is carcinogenic when inhaled in powders with a concentration greater than 1% and a particle size of titanium dioxide ≤ 10 μm.

The substance will then require a warning label with H351 warning phrase and a health warning pictogram. For mixtures a phrase EUH211 or EUH212 will be required. If approved by the European Parliament and the Council of Ministers, the Regulation is expected to be published in early 2020 and will enter into force 18 months after its publication. The change will have a major impact on the industry, as titanium dioxide is used extensively in for example paints, colours, plastics, paper and coatings, including those used in consumer products.

The European Parliament and the Council will have two months to raise any objection to the publication of the Regulation. If the Regulation proceeds without objection, the amendments to Annex VI to CLP will enter into force within 18 months of the publication of the Regulation.

Do you need help in monitoring your company´s  chemical obligations or in implementing classification changes? Our chemical experts will help you!

We can also provide you with new compliant safety data sheet templates.

Contact us today:

sales@ecobiomanager.com

Blog: REACH – ripple effects on the whole supply chain

An important milestone for the European chemical industry has been reached as the final REACH registration deadline for substances passed in 31.5.2018. The European REACH Regulation ((EC) No 1907/2006), however, continues to set high standards for the whole industry, from manufacturers, importers, formulators and distributors all the way down to downstream and end users.

Effects on the supply chain

Whilst the REACH registration deadline passed in 31.5.2018 already, it can take up to 3 months for the European Chemicals Agency ECHA to make a registration decision; your supplier might be fully REACH compliant if they have submitted their dossier on time, but might not yet have received a registration decision, i.e. a registration number, from ECHA. In complex cases where an extension might have been received from ECHA and the Director’s Contact Group, receiving a registration decision will take even longer than that.

This also means that the potential effects of the last registration deadline that mainly dealt with SMEs and their substances might affect supply chains with a delay. Whether or not the registering company had enough assets and know-how to pull through the registration might become evident only later on. If a company has decided to cease their manufacture by 31.5.2018, they are still allowed to sell all their supply gathered before the deadline to downstream users as distributors. Whether or not some companies or some products might be dropping out, or the market become more homogenized, will most likely be found out only after the dust of the final registration deadline has settled.

Communicating REACH compliance to authorities and stakeholders

In terms of supply chains and their continuance, it is important to notice that pre-registration numbers are no longer valid. It is also important to notice that either a generic or a company-specific version of the actual REACH Registration number can be put forward. The company-specific version always consists of four parts of numbers, e.g. 01-2119458769-17-0003, whereas the generic form might only consist of three (e.g. 01-2119458769-17 or 01-2119458769-17-XXXX). Make sure that your suppliers have actually registered the substance in their name, and are not just giving you a generic number to keep you content for a while.

A good way to communicate a company’s adherence to REACH and its many requirements is a REACH declaration of compliance. Such a statement can serve as a testimony to the authorities or as communication to customers and other stakeholders to show that your company is indeed REACH compliant in all the relevant aspects of the REACH Regulation. Such a statement is a hard asset outside of Europe as well.

A shift in focus towards formulators

As the burden of REACH has previously been mainly on substance manufacturers and EU importers, the focus of the regulation is now shifting towards formulators. The safe use of mixtures is a topic that will need to be addressed by operators in the coming years in the form of unique formula identifiers (UFI) and poison centre notifications (PCN). This will require a thorough knowledge of the composition and hazardous properties of the supplied mixtures as well. Exposure scenarios and their utilization in communicating the safe use of mixtures will surely be giving formulators some gray hair.

Increasing amount of regulation

As ECHA is now the holder of the world’s largest open database of substance information, plans on how to best utilize the gathered information on the registered substances are big. On a general level this might mean more substance restrictions and harmonized classifications. Manufacturers of highly hazardous substances or those who have submitted incomplete information, on the other hand, might become a target for even more scrutiny.

Reaching the legislative deadline will also most definitely result in increased supervision from national authorities on whether or not companies have fulfilled their various requirements under the REACH Regulation, with regard to substance restrictions and registrations especially. A more scrutinized assessment of SDS’s and of the responsibilities that downstream users have regarding exposure scenarios and their assessment against their own conditions could also result.

Harmonized classifications under the CLP Regulation ((EC) No 1272/2008) themselves can also be a source of restriction, as is now happening with titanium dioxide. A common chemical used as a pigment and thickener in a wide variety of applications for consumer use, including foodstuff, is about to receive a category 2 carcinogen classification, meaning heavy restrictions on its use in many of its current applications.

Competitive edge for European companies

One of the main original aims and visions of the comprehensive chemical legislation that is REACH is to ensure a high level of health and environmental protection. Another aim of the regulation has been to stimulate innovation and enhance the competitiveness of European brands on international markets. As chemical legislation is getting stricter all around the globe, REACH is indeed serving as an important example for other countries striving for increased chemical safety. This is one of the reasons why being REACH compliant is an asset all over the world; still today, REACH is the most advanced chemical legislation in the world.

Consumer image – a threat or a possibility?

An increasing amount of portals and sources for consumers on how to use chemicals safely and on how to find relevant safety information on chemicals have also emerged. Whilst a huge amount of scientifically-based information on chemicals and their safe use is now publicly available, what should never be underestimated is the opinion and views of the general public. Companies should therefore have an understanding of what the data gathered by them actually means and how it can be translated into facts and to transparent stakeholder communication.

Registration in the future

Now that all the three major deadlines for the REACH registration of chemicals in different tonnage bands have passed, the registration of future substances will require more planning in advance; as of now substances will need to be registered before manufactured or imported into the EU in amounts above 1 tonne per year. Make sure to make use of all the relevant exemptions to registration requirements. For R&D substances, for example, a PPORD notification will give your company a 5-year period of reflection before deciding on whether to continue with the substance or not. For substances produced in circular economy processes, further exemptions also apply.

 

For more of the concrete results that REACH keeps delivering, see the press release of the European Commission on the matter: http://europa.eu/rapid/press-release_IP-18-1362_en.htm

 

Leea Ojala, Senior consultant

20.6.2018, Helsinki

 

In case you have any questions about your obligations under the REACH Regulation or are interested in a REACH Declaration of Compliance or a screening of substance restrictions on your chemicals, contact Ecobio’s experts at: info@ecobio.fi or tel. +358 20 756 9450.