EU Taxonomy: Implementation and Reporting
The ambition of the EU Taxonomy
In June 2020, the European Union adopted the Taxonomy Regulation — a central pillar of the EU’s action plan for financing the transition to a sustainable economy.
The six environmental objectives of the EU Taxonomy
The EU Taxonomy aims to:
- Encourage companies to assess their positioning within the EU’s sustainable transition pathway;
- Enable financial market participants to prioritize the allocation of capital to projects and businesses making the most significant contributions to that transition.
- To this end, the regulation introduces a classification system (taxonomy) of economic activities based on their potential to contribute to the six environmental objectives of the EU Taxonomy (often referred to as the "Green Taxonomy"):
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
Our expertise for successful implementation
At Forvis Mazars, our specialists are ready to assist you in implementing the EU Taxonomy requirements, which include:
- Analyzing how your company’s activities align with the Taxonomy framework
- Publishing disclosures on the methodology and outcomes of this analysis
The EU Taxonomy mechanism and its business impact
The Taxonomy is built on a three-step approach that all in-scope companies must follow:
1. Eligibility Assessment
"Eligible" activities are those explicitly listed in the Taxonomy (currently around 80 activities across 13 key sectors responsible for over 90% of EU GHG emissions). The eligibility analysis consists of identifying which of your company’s activities appear in the official list.
2. Alignment Assessment
Eligible activities are considered “Taxonomy-aligned” when they meet three criteria:
They make a substantial contribution to at least one of the six environmental objectives;
They do no significant harm (DNSH) to any of the other objectives;
They meet minimum social safeguards (OECD, UN, and ILO guidelines).
The regulation provides detailed technical screening criteria for each requirement.
3. Contribution Disclosure
Once aligned activities are identified, companies must calculate and disclose the proportion of those activities relative to their overall operations, reflecting their level of alignment with the EU’s sustainability goals.
The first reporting obligations took effect on January 1, 2022, for companies already subject to the Non-Financial Reporting Directive (NFRD).
Implementation of the EU Taxonomy and Sustainable Investments
We guide your company through every stage of EU Taxonomy implementation — from initial understanding to full reporting:
1. Awareness and Governance
- Clear explanation of how the taxonomy works
- Training for internal teams
- Information sharing across departments
- Engagement with stakeholders
- Establishing dedicated governance and regulatory monitoring teams
2. Current-State Assessment
- Identification of taxonomy-eligible activities
- Clarifying your target objectives
- Conducting a gap analysis to define required organizational changes
- Engaging external support if needed
3. Implementation and Execution
- Eligibility Analysis: as the first step
- Alignment Analysis: aligned with regulatory updates — either starting with the two climate objectives or directly addressing all six environmental goals
- Organizational Adjustments: conducted in parallel to support long-term alignment
Why Forvis Mazars?
- Anticipate regulatory impacts and stay fully informed through expert insight tailored to your business context
- Manage the operational complexity of applying new sustainability disclosure obligations
- Leverage an integrated approach for an efficient and reliable transition
- Multidisciplinary expertise offering a 360-degree view of the compliance process — combining ESG, regulatory, audit, financial, and reporting know-how