EU taxonomy timeline: milestones and deadlines you should know
The European Commission developed the world's first taxonomy of environmentally sustainable activities to create a common definition of sustainable economic activities and thereby make it easier to channel investments in a sustainable direction.. The taxonomy will contribute to the European Union's climate resilience goals, particularly zero emissions by 2050. The European Union taxonomy entered into force on 12 July 2020 and is designed to provide the most comprehensive picture of opportunities for investors to help meet Europe's climate goals, including developing low-carbon sectors and reducing the carbon footprint.
The EU taxonomy is already in place, and listed companies with more than 500 employees in the nearest future will have to disclose the extent to which they meet the criteria. Starting from January 2023, it will become mandatory for large companies covered by the Non-financial Reporting Directive (NFRD). In this article, we'll look at the EU taxonomy summary, what you need to do to comply, and provide a timeline that shows the key dates in the regulation.
What is the timeline for the Taxonomy?
Let's break down the definition to understand the timeline for the EU taxonomy better.
So, the EU taxonomy is a system based on scientific criteria, defining activities that will allow the decarbonization of the economy.
EU taxonomy environmental objectives
The EU taxonomy regulation timeline goal is for governments, companies, banks, investment, pension funds, and insurance companies to organize and report on their activities. This would make more money available for all activities aimed at facilitating the green transition. If you are an institution involved in construction and agricultural projects, review the EU taxonomy in construction, as well as the EU taxonomy in agriculture.
What is the release and application timeline for EU taxonomy?
Now let's take a closer look at the time frames for the EU taxonomy. For a better understanding, we will take a separate look at regulatory development and when companies must file sustainability reports.
For whom is EU taxonomy regulation disclosure mandatory
Let's first review the regulatory chronology so that we understand the order in which certain regulatory acts were adopted. The Delegated Climate Act began to be applied in 2022. In the same year, a complementary climate delegated act was finalized, after which it was published in the official journal. The implementation of this document will be delayed by one year. In the meantime, the Environment Delegated Act is still under development.
The Sustainable Finance Platform report has already been drafted, but has yet to be formally adopted as a delegated act. The exact date of this event is unknown, but it is expected to occur in late 2022. If it does happen on the due date, financial entities should start disclosing the taxonomy eligibility report in January 2023.
Product-level reporting for funds will also include a taxonomy assessment for portfolio companies. The product-level taxonomy disclosure under the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation article will apply beginning 1 January 2023.
Now let's take a closer look at regulatory development.
Now let's look at the specific deadlines by which businesses must provide information according to the EU taxonomy reporting timeline. In annual reporting for the financial year 2022, companies required to report on the taxonomy must disclose the proportion of turnover, OpEx and CapEx derived from activities aligned with the taxonomy criteria. Take a look at the table below for more information on further steps.
Consider Celsia your trusted partner
All of the above may seem somewhat complicated at first glance. You may need help to conduct a sustainability assessment in a timely manner to fully meet the deadlines mentioned on the EU taxonomy implementation timeline. Celsia is here to do just that. One of our company's main goals is to make sustainability assessments simple and fast, and most importantly, we make them effective with our EU taxonomy reporting software.
It doesn’t matter what size your company is or the complexity of the case. Working with Celsia, you can participate in the green finance system. Celsia offers a high-tech platform to make sustainability assessments for commercial organizations, consulting firms, investment funds, and banks. There’s no need to hire a third-party company to evaluate your business using taxonomy criteria. Why waste your money on this when you can use a tool that allows you to do it yourself?
A prime example of the feasibility of using the Celsia platform is the case of one of our clients. Quantafuel is a chemical waste company that has set itself the noble goal of solving the global plastic problem. The company approached Celsia in mid-2021.
After reviewing all the benefits of using our platform, Quantafuel decided to do its own sustainability assessment and was excited with the results. With Celsia, Quantafuel was able to conduct the initial EU taxonomy assessment in full accordance with best practices.
In addition, Quantafuel avoided the need to keep track of EU taxonomy updates, as the platform automatically downloads all necessary data.
This is just one example of the successful use of the platform. Check out our case studies for more information.
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