How should I be aware of EU taxonomy, now that reporting it is no longer mandatory?

1. Market Expectations

Banks, investors, and large customers increasingly expect EU Taxonomy data to assess sustainability. Financial institutions need this data for their own Green Asset Ratio calculations, and may require non-obligated companies to provide taxonomy information before approving loans or investments. Even without a legal requirement, companies may need to provide this information to access financing or remain competitive in supply chains.

2. Access to Finance

Demonstrating Taxonomy alignment can help companies secure better loan terms, qualify for green bonds, and access grants or subsidies that prioritize sustainable activities. Many EU and national funding programs now prioritize or require evidence of sustainable activities as defined by the Taxonomy

3. Reputational Advantages:

Voluntary alignment with the Taxonomy signals a commitment to sustainability, builds trust, and helps companies adapt to future regulatory changes.

Practical Steps:

• Determine which of your business activities qualify as Taxonomy-eligible.
• Consult with stakeholders to understand their expectations regarding your company’s Taxonomy alignment.
• Assess whether your company can achieve Taxonomy alignment and identify the steps needed to do so.

In summary, even though public EU Taxonomy reporting may not be mandatory, stakeholders such as investors, banks, and major business partners are still likely to request information about your company’s performance in relation to the EU Taxonomy framework. If navigating these requirements feels overwhelming, contact us, we’re here to help you through the process.

In this series of articles, our expert Meng Beniard explains what the changes around the EU taxonomy mean for businesses today and in the future, and offers concrete tips for action.

Read the other articles of the series here:

• What Does the Omnibus Package Mean for EU Taxonomy Reporting?
• EU Taxonomy is being incorporated into a growing number of legislative frameworks