EU taxonomy: on the safe side with Substain
A look at the EU Taxonomy Regulation
The EU Taxonomy is a classification system of the European Union that uses the EU Taxonomy Regulation to determine which economic activities are considered environmentally sustainable. The aim is to provide companies and investors with clear guidelines in order to promote sustainable investments and drive forward the transition to a climate-neutral economy.
The EU Taxonomy Regulation requires companies to submit an EU Taxonomy Report, i.e. a detailed disclosure of their economic activities with regard to their environmental friendliness and social compatibility.
The six environmental targets are a central component of the EU Taxonomy Regulation:
- Climate protection
- Adaptation to climate change
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Prevention and reduction of environmental pollution
- Protection and restoration of biodiversity and ecosystems
The EU taxonomy is implemented in a two-stage process:
- The first step is to determine taxonomy capability. This involves examining which of the company's economic activities can be sustainable at all. The operation of a coal-fired power plant, for example, cannot under any circumstances be considered sustainable within the meaning of the EU Taxonomy Regulation.
- In the second step, taxonomy conformity is determined for all economic activities that are taxonomy-eligible. This involves checking whether the relevant criteria for the respective economic activity are also met. An economic activity is considered compliant if the specific criteria are met and no significant negative impact on one of the other objectives is to be expected (principle of "Do No Significant Harm").
Are you affected by the EU Taxonomy Regulation?
You can see whether your company is on the right track when a light goes on
The EU Taxonomy Regulation applies to all large companies and listed companies in the EU that are obliged to make disclosures under the Corporate Sustainability Reporting Directive (CSRD). This affects the following players in particular:
- Companies and investors who need to define sustainable activities and provide transparent insights into their ESG strategies.
- Investors and financial markets that want to facilitate access to sustainable investments and need a clear framework for investment decisions.
- The public and stakeholders, who increasingly expect companies to actively contribute to environmental and climate protection.
Advantages of the ESG software Substain for EU taxonomy implementation
EU Taxonomy Regulation made easy - How Substain:
Substain supports companies at every stage of the implementation of the EU taxonomy. The software guides you through all the important steps to ensure consistent and taxonomy-compliant ESG reporting:
- Data collection and activity analysis: Substain facilitates the collection of the necessary data on economic activities and their environmental impact. The software guides companies through the classification of activities according to the criteria of the EU taxonomy and offers ready-made modules for assessing environmental objectives.
- Compliance assessment and taxonomic determination: Substain checks whether the company's activities meet the taxonomy criteria (taxonomic determination) and comply with the "Do No Significant Harm" principle. For climate protection, CO₂ data based on the GHG Protocol is integrated in order to accurately record the emissions status of the activities.
- Creation of taxonomy-compliant reports: Substain generates standardized reports that are fully taxonomy-compliant and suitable for disclosure under the CSRD. The reports can be easily shared with stakeholders and meet the legal requirements for ESG transparency.
- Regular review and compliance management: The software enables continuous monitoring of activities and their taxonomy compliance, allowing companies to respond to new regulatory requirements at any time. Substain provides regular updates of the applicable taxonomy criteria (taxonomic determination) to ensure long-term compliance.
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