How to disclose information properly?
After a scrutiny period of nearly half a year, the Delegated acts covering the requirements for the first two environmental objectives (climate change mitigation and climate change adaptation) as well as requirements on how to disclose information properly were published in the Official Journal of the European Union.
Article 8(2) of the EU Taxonomy Regulation (EU) 2020/852 describes basic key performance indicators (KPIs) related to turnover, capital expenditure (CapEx) and operating expenditures (OpEx) for disclosure. It, however, did not specify the detailed methodology for calculation of the key performance indicators and rather reference to a dedicated delegated act. We touched on who must report earlier (EU Taxonomy: Does it affect me).
The second delegated act (disclosures delegated act) clarifies the requirements of Article 8 in (EU) 2020/852 of the EU Taxonomy regulation, and provides the methodology, content and presentation format for information disclosure of non-financial and financial undertakings for EU Taxonomy-eligibility and -alignment.
What should be disclosed and when?
Non-financial undertakings
At the beginning of 2022 non-financial undertakings shall disclose for the year 2021 the proportion of economic activities that are taxonomy eligible and taxonomy non-eligible in their total turnover, CapEx and OpEx and the qualitative information about the KPIs for the disclosure. EU-Taxonomy alignment disclosures will start from January 2023, for the year 2022.
Financial undertakings
For year 2022 and 2023 financial undertakings shall only disclose the proportion in their total assets to exposures to:
- taxonomy eligible and taxonomy non-eligible economic activities;
- central governments, central banks and supranational issuers;
- derivatives; and
- undertakings not obligated to publish NFRD.
EU Taxonomy alignment disclosure starts from the year 2024 onwards.
KPIs
Non-financial undertakings
The delegated act further specifies KPIs related to turnover, CapEx, and OpEx and calculation methodology.
Financial undertakings
This delegated act introduces KPI´s and calculation methodology for financial undertakings to be used.
- Asset managers - Green Investment Ratio (GIR), proportion of taxonomy-aligned investments managed by an asset manager in the value of all investments both their collective and individual portfolio management activities
- Credit institutions – Green Asset Ratio (GAR) is the main KPI defined as proportion of credit institutions asset invested in environmentally sustainable economic activities as a share of total covered assets.
- Investment undertakings – Separate KPIs for services and activities in their account and not dealing in their account
- Insurers and reinsurers – KPIs´ related for investment and to underwriting activities
