Draft Delegated Act on Environmental Taxonomy

European Comission (EC)

In June 2020, the Taxonomy Regulation (TR) was published with the aim of channelling capital towards activities that substantially contribute to the achievement of the objectives of the European Green Deal. In 2021, the European Commission (EC) published the Delegated Acts on Climate Taxonomy and on Dissemination of the Taxonomy which elaborate on the first two objectives of the TR. In line with the mandates of the TR, in 2020 the EC asked the Platform on Sustainable Finance (PFS) for advice on the technical screening criteria (TSC) on the remaining four environmental targets, as well as on the possible need to update the criteria for the climate targets of the EU Taxonomy.

In this context, in April 2023 the European Commission published the Draft Delegated Act on Environmental Taxonomy which develops the non-climate taxonomy's environmental objectives, such as the sustainable use and protection of water and marine resources; the transition to a circular economy; the prevention and control of pollution; and the protection and restoration of biodiversity and ecosystems. In addition, amendments to the previous Delegated Acts implementing the TR have been proposed.


Draft Delegated Act on Environmental Taxonomy

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Executive summary

The EC has opened for consultation the Draft Delegated Act on Environmental Taxonomy containing a new set of technical screening criteria (TSC) for economic activities that substantially contribute to one or more of the non-climate environmental objectives (TR objectives 3 to 6). In parallel, it has also proposed amendments to the Delegated Act on Disclosure of the Taxonomy to ensure that the disclosure requirements set out therein are consistent with the proposed new provisions. Finally, amendments have been proposed to the Delegated Act on Climate Taxonomy, mainly to introduce new activities contributing to objectives 1 and 2 of the TR.

Main Content

This Technical Note summarises what is new in the proposed Delegated Act on Environmental Taxonomy and the amendments implemented to previous Delegated Acts:

Text of the draft Delegated Act on Environmental Taxonomy and amending the Delegated Act on Dissemination of the Taxonomy.

  • This Delegated Act specifies the TSCs under which certain economic activities in the sectors of manufacturing industry, water supply, sewerage, waste management and remediation, construction, civil engineering, disaster risk management, information and communication, environmental protection and restoration, and accommodation activities can be considered as contributing substantially to non-climate environmental objectives.
  • This Delegated Act adds new disclosure dates for the new objectives and activities to the Delegated Act on Dissemination of Taxonomy:
    • From 1 January 2024 until 31 December 2024, non-financial companies will only disclose the proportion of their eligible and non-eligible assets under the Taxonomy and the new activities added to the Delegated Act on Climate Taxonomy.
    • From 1 January 2024 until 31 December 2024, financial institutions shall only disclose the proportion in their secured assets of exposures to non-eligible and eligible economic activities under the Taxonomy and the new activities added to the Delegated Act on Climate Taxonomy.
    • As of 1 January 2025, KPIs of non-financial companies will cover the economic activities set out in the Delegated Regulation on Environmental Taxonomy.
    • From 1 January 2026, the KPIs of financial companies will cover the economic activities set out in the Delegated Regulation on Environmental Taxonomy.

Text of the draft amendment to the Delegated Act on Climate Taxonomy.

  • New economic activities that substantially contribute to climate change mitigation in the manufacturing and transport sector are incorporated.
  • New economic activities that substantially contribute to climate change adaptation are incorporated in the following sectors: water supply; construction; information and communication; professional, scientific and technical activities. A new sector is also added: disaster risk management.

Next steps

  • Final publication of the Draft (date to be determined).
  • The entry into force of this document Will be from 1 January 2024 (date of application).

Download the technical note on Draft Delegated Act on Environmental Taxonomy.