European Commission adopts the EU Taxonomy Regulation
On 6th July 2021, the first Delegated Act supplementing Article 8 of the Taxonomy Regulation was adopted by the Commission, specifying the content, methodology and presentation of information to be disclosed by financial and non-financial undertakings concerning the share of sustainable economic activities in their business. The Delegated Act will be transmitted for scrutiny by the European Parliament and the Council for a period of 4 months, extendable by a further 2 months. A second Delegated Act for the remaining objectives will be published in 2022.
Through its Delegated Acts, the EU Taxonomy Regulation aims to create a common classification system for economic activities by establishing a list of environmentally sustainable activities that contribute to the EU’s environmental objectives, with the goal of scaling up sustainable investments and ultimately support the implementation of the European Green Deal.
Overall, CECIMO supports a closer link between financial and sustainability reporting. For our sector, it is important that the reporting obligations linked to the EU Taxonomy Regulation serve as a real driver for sustainable development without creating an unnecessary administrative burden and additional costs for our enterprises.
Nevertheless, we question whether the draft Delegated Act (DA) on Article 8 in its current version is fit for purpose. The proposal requires disclosures which will overhaul the EU’s reporting procedures. The granular level of disclosure will lead to costly over-reporting on the taxonomy and is currently not striking the right balance to ensure enough added value for investors when deciding to finance economic activities enabling the transition to a climate-neutral and sustainable Europe.
In this regard, we urge the Commission to recognise the immense journey it is asking companies to embark on as they adapt to the new reporting requirements. We also urge the Commission to make requirements feasible and cost-efficient.