The deadlines are as follows:
January 1, 2022
- All in scope companies need to report the proportion of their turnover, Capex, Opex, AUM (for asset managers) or Green Asset Ratio (for banks and credit institutions) that is Taxonomy-eligible.
- Eligibility is merely an indication that a company makes money in an activity that can be tested under the Taxonomy. It is expected that eligibility will be a much larger value than the alignment reported a year later.
- In addition, according to current draft rules, asset managers that market investment products as sustainable will also need to report alignment of these products with the Taxonomy. This is subject to the Regulatory Technical Standards from the European Supervisory Authorities expected in Q4 2021.
January 1, 2023
- All non-financial corporates need to report the proportion of their company primary KPIs (turnover, Capex, Opex) that are Taxonomy-aligned.
- A company needs to demonstrate that it substantially contributes to one of six environmental objectives and does no harm to any other, while also being in compliance with minimum social safeguards. The Taxonomy Compass is a user-friendly tool to assess detailed requirements are known for the mitigation and adaptation objectives.
January 1, 2024
- All financial firms (asset managers, banks, and insurance and pensions providers) need to report the Taxonomy alignment of their underlying investments, but only for investee companies that have reported this detail themselves (i.e. those that reported from January 2023).
January 1, 2025
- Financial firms can use estimates for third country investments to evaluate Taxonomy alignment of primary KPIs (turnover, Capex, Opex) if company-reported data is not available. This is specified under the delegated act for article 8 (article 7 (7)), but dependent on a 2024 review period (article 9).
- However, firms can only use estimates to evaluate the Do No Significant Harm (DNSH) and Minimum Social Safeguards criteria, not the Substantial Contribution criteria (SC), which requires company-reported data. As a reminder, evaluation of the substantial contribution, DNSH, and social safeguards are all required to claim taxonomy alignment, per the Taxonomy Regulation.
Financial firms can also choose to voluntarily disclose their taxonomy alignment for non-EU, SME, or sovereign holdings. Such disclosure would not form part of Taxonomy-alignment reporting of primary KPIs, but would be permitted to help them provide an understanding of the sustainable nature of their wider operations and financial products offerings. They may choose to do this alongside their first disclosure of alignment in 2024.
Investment firms may also choose to assess the taxonomy alignment or estimated alignment of the investee company during portfolio construction or debt capital market activities, ahead of reporting requirements in 2024. Thus, it would make sense to gather data that can convey the full scope of a company’s sustainable activities in advance.