The EU Taxonomy – a common language for sustainability
The EU taxonomy is a green classification system that creates a common language around climate and environmentally sustainable activities. The taxonomy helps ensure that investments support the EU's green transition goals.
A green classification system
The EU Taxonomy for Sustainable Activities is a green classification system that translates six key European climate and environmental objectives into clear criteria for specific economic activities, primarily for investment purposes.
It establishes a common language for defining climate and environmentally sustainable activities, helping to ensure that future investments increasingly support the green transition.
In short, eligible activities must contribute to the overarching goal of achieving net-zero emissions by 2050.
Sustainable finance
Sustainable finance refers to the integration of environmental, social, and governance (ESG) considerations into investment decisions across companies and the financial sector.
Achieving this requires a shared understanding of what qualifies as sustainable — and the EU Taxonomy for Sustainable Activities plays a key role in providing that clarity.
For companies subject to the EU Taxonomy, reporting obligations will apply, and in the future, these disclosures will be included in the management report as part of the sustainability reporting requirements.
However, a much broader group of companies can also benefit from using the taxonomy strategically — as a guide for improving market access, attracting capital, and identifying opportunities that support a greener business direction.
Start your morning with a coffee briefing on the EU Taxonomy
Who is covered by the Taxonomy?
Not all companies are subject to the requirements from the beginning. However, more companies will be included progressively and will therefore be obliged to follow the guidelines over time.
The timeline for inclusion is as follows:
- 2021 – Listed companies with more than 500 employees
- 2025 – Listed companies (Accounting Class D) with more than 250 employees and Unlisted companies (Accounting Class C) with more than 250 employees
- 2026 – Small listed companies
- 2028 – Non-EU companies with subsidiaries or branches in the EU
This phased timeline reflects changes introduced in the European Commission’s Omnibus Proposal.
