Knowledge Base
Explain the EU Taxonomy for sustainable activities and assess its impact on corporate reporting and investor decision-making
Which technical criterion must be met for new building construction to be considered sustainable under the EU Taxonomy?
For new building construction, the primary energy demand must be less than or equal to 10% below the NZEB (Nearly Zero Energy Building) threshold. This technical criterion is part of the Technical Screening Criteria (TSC) specific to each activity.
What percentage of companies analysed by Sustainalytics fail to meet the minimum safeguards criteria?
According to Sustainalytics, approximately 10% of analysed companies fail to meet the minimum safeguards criteria. This means these companies cannot qualify their activities as aligned with the EU Taxonomy, even if they satisfy the technical criteria.
What is the first step in the process for qualifying an economic activity as sustainable under the EU Taxonomy?
The first step is to verify the eligibility of the economic activity. An activity is eligible if it appears in the annexes of the delegated acts, identified by NACE codes. For example, the Climate Delegated Act (EU) 2021/2139 covers the first two environmental objectives since January 2022.
What average percentage of revenue from European companies is aligned with the EU Taxonomy according to the EU Taxonomy Barometer 2024?
According to the EU Taxonomy Barometer 2024, European companies show an eligibility of 30 to 35% of revenue but an alignment of only 9 to 10%. This reveals a significant gap between potentially covered activities and those that actually meet the technical criteria.
True or False: The real estate sector shows an eligibility rate of 87% but a revenue alignment of only 15 to 19% according to the EU Taxonomy Barometer 2024.
Data from the EU Taxonomy Barometer 2024 show that the real estate sector has an eligibility rate of 87% but a revenue alignment of only 15 to 19%. This illustrates the significant sectoral variations in compliance with the EU Taxonomy.
True or False: SFDR Article 9 funds must declare their share of investments aligned with the EU Taxonomy.
Yes, SFDR Article 9 funds are required to declare their share of investments aligned with the EU Taxonomy. However, only about 8% of these funds target more than 10% taxonomy alignment, which reflects the current constraints of sectoral coverage and data availability.
Categorize items by dragging them to the appropriate zones
Items to categorize:
High eligibility (>50%)
Medium eligibility (30-50%)
Low eligibility (<30%)
The data show significant sectoral variations. The real estate sector has an eligibility rate of 87%, the energy and utilities sector 56%, while the healthcare and retail sectors have near-zero eligibility. These differences reflect the variable sectoral coverage of the EU Taxonomy.
Four pillars of minimum safeguards (Article 18)
Click to see answer
The minimum safeguards include: human rights (including labour and consumer rights), anti-corruption, tax compliance and governance, and competition law compliance. These criteria are based on the UN Guiding Principles on Business and Human Rights.