Reporting obligations under the EU taxonomy

This includes climate protection measures that are primarily aimed at reducing greenhouse gas emissions. The EU considers the development and use of renewable energies to be important economic activities. The EU taxonomy reporting obligation also attempts to ensure that companies in the construction sector increase the energy efficiency of buildings and that industrial companies make their industrial processes more energy-efficient. Support for low-emission means of transportation and infrastructure is also seen as a desirable activity under the EU Taxonomy. This could be electrified train connections, for example.

The second environmental objective of the EU Taxonomy Regulation on which companies must report is the adaptation of business activities to climate change. For example, investments by companies that serve to improve flood protection systems, increase drought tolerance (e.g. in agriculture) and adapt buildings to extreme weather conditions are assessed positively under the EU Taxonomy. The implementation of early warning systems for natural disasters also falls under this objective.

Company activities that are conducive to reducing water pollution, e.g. the installation of filter systems beyond the legally prescribed level, can be counted towards EU taxonomy conformity. Measures that make the use of water resources more efficient and sustainable can also contribute to this goal. In the area of agriculture, measures and investments that enable a reduced use of fertilizers and thus reduce the burden on marine ecosystems can contribute to this goal.

Another option that contributes to the reduction of greenhouse gases as well as the reduction of resource consumption is the promotion of the circular economy. The EU Taxonomy Regulation encourages companies to make their products recyclable and to report on their progress. In particular, the extended reporting obligation on taxonomy compliance for all income, expenditure and investments is intended to ensure that all goods produced can be easily recycled and reused. Business activities that increase the lifespan of goods, e.g. through reparability or shared use, are also considered under this objective.

This environmental objective plays a key role in the EU taxonomy reporting obligation, particularly in the context of DNSH audits. A prerequisite for the taxonomy conformity of any business activity is that it has no significant negative effects on other environmental objectives. It is therefore necessary to check manufactured goods for harmful ingredients, noise emissions and pollutant emissions in the manufacturing process. Companies can achieve taxonomy compliance and fulfill their reporting obligations by taking measures to reduce these points of criticism.

This environmental objective has not yet been elaborated much in the EU taxonomy and, like the prevention and reduction of pollution, plays a role more in the context of the DNSH assessment of business activities. For example, projects that serve the creation of renewable energies must be examined to determine whether such activities may have a negative impact on biodiversity. This could be the case if, for example, habitats of protected or rare animals and plants are affected or additional areas are sealed by construction measures. Activities such as the renaturation of rivers and lakes or the unsealing of parking lots, for example, can have a positive impact in the context of reporting obligations for EU taxonomy.