Money & markets
Regulation (EU) 2020/852
EU Taxonomy
Taxonomy Regulation
A dictionary of which economic activities count as environmentally sustainable — used in CSRD reports, funds, and green bonds — not a ban on everything else.
Does this hit me?
A ‘green’ fund should say how much is taxonomy-aligned. That is not the same as ‘will make you money’ or ‘is fossil-free in every holding’.
Check in the wizardPick a country in the header to see who enforces this at home. Union text is not the last word for directives.
How it rolls in
Jul 2020
Regulation entered into force.
2022
First climate delegated act applied in reports.
2023+
Environmental delegated act and amendments; CSRD links it to the management report.
Why it exists
‘Green’ was a marketing word. The Union wanted a common screen: substantial contribution, do-no-significant-harm, and minimum social safeguards.
What actually changes
- Large companies in CSRD scope report turnover, CapEx and OpEx aligned with the taxonomy.
- Financial market participants use it in SFDR and benchmark disclosures.
- Technical screening criteria live in delegated acts and change.
- Nuclear and gas sit in the climate act with conditions — politically loud, legally specific.
How it hits you
A ‘green’ fund should say how much is taxonomy-aligned. That is not the same as ‘will make you money’ or ‘is fossil-free in every holding’.
Heard this? Not quite.
Claim: If you are not aligned, you are illegal.
Non-aligned activity can still be lawful. The taxonomy is a disclosure and labelling grammar. Finance and CSRD make it expensive to ignore, not a criminal code.
Latest official statements
All EU NewsNo tagged Commission, Parliament or Council statement in the current feeds.
Board one-pager
Board one-pager
Who this is for: EU finance, trade and reporting teams. Regulation (EU) 2020/852. Climate delegated act in use since 2022; more activities added since.
Scope
- You report under CSRD, or you manage funds/benchmarks under SFDR, or a bank/customer is asking you to tag activities.
First 90 days
- This month: Map NACE / activities to delegated-act criteria.
- This quarter: DNSH evidence for the activities you want to call aligned.
- This year: Minimum-safeguards story (human rights, tax, fair competition, bribery).
Penalties: Misleading claims sit under consumer and securities law; CSRD assurance and supervisor findings for reporters.
For companies
How to stay on the right side of this file
Practical order of work, not a substitute for counsel. CSRD undertakings and financial market participants; suppliers who answer their questionnaires.
You are probably
CSRD undertakings and financial market participants; suppliers who answer their questionnaires.
Effort
Treat as an operating process, not a project.
Budget
SME: owner time plus one honest vendor. Large: a named lead, not a taskforce slide.
Roles in this file
The same company can wear more than one hat. Classify before you buy a tool.
Finance + sustainability
This pack names Finance + sustainability as an owner of early work.
Map NACE / activities to delegated-act criteria.
EHS
This pack names EHS as an owner of early work.
DNSH evidence for the activities you want to call aligned.
Legal
This pack names Legal as an owner of early work.
Minimum-safeguards story (human rights, tax, fair competition, bribery).
Are you in scope?
Act now- You report under CSRD, or you manage funds/benchmarks under SFDR, or a bank/customer is asking you to tag activities.
Usually not, if
- A shop with no green claim and no large customer asking.
- Activities with no technical screening criteria yet — say eligible/not, do not invent.
First moves
- This monthMap NACE / activities to delegated-act criteria.Finance + sustainability
- This quarterDNSH evidence for the activities you want to call aligned.EHS
- This yearMinimum-safeguards story (human rights, tax, fair competition, bribery).Legal
- Answer buyer questionnaires with eligible/not. Do not claim alignment you cannot evidence.
If you skip this
- Calling a product ‘taxonomy-aligned’ in marketing when only a sliver of CapEx is.
- Ignoring the gas and nuclear conditions if you use those activities.
Done looks like
- Activity mapping
- DNSH files
- CapEx plan
- Assurance trail if required
Keep this evidence
- Activity mapping
- DNSH files
- CapEx plan
- Assurance trail if required
Ask vendors
- Which of your activities are taxonomy-eligible? Aligned? On what evidence?
Where programmes usually break
- Calling a product ‘taxonomy-aligned’ in marketing when only a sliver of CapEx is.
- Ignoring the gas and nuclear conditions if you use those activities.
Call counsel when
- Misleading claims sit under consumer and securities law; CSRD assurance and supervisor findings for reporters.
- A supervisor letter, a dawn information request, or a deal that warrants this file.
Enforcement
Misleading claims sit under consumer and securities law; CSRD assurance and supervisor findings for reporters.
National accounting/financial supervisors for reports; ESMA for funds; consumer authorities for retail claims.
Need a stack, not one file? Open the company desk
Professional briefing
Legal architecture and duties
For counsel, compliance, and policy teams. Not advice. The Official Journal still wins.
- Instrument
- Regulation
- Legal basis
- Art 114 TFEU · Regulation (EU) 2020/852
- Application
- In force; climate delegated act used in 2022 reports; environmental act and amendments since. CSRD is the corporate reporting hook.
A classification, not a ban. Substantial contribution + DNSH + minimum safeguards. Counsel’s job is eligibility vs alignment, and stopping marketing from overselling a CapEx ratio.
How the file is built
Six objectives (Art 9)
Climate mitigation/adaptation, water, circularity, pollution, biodiversity.
Delegated acts
Technical screening criteria — the real statute.
Operators
| Role | Who | Core duties |
|---|---|---|
| Undertaking under CSRD | Reports KPIs. | Turnover, CapEx, OpEx eligibility and alignment. |
| Financial market participant | SFDR and benchmarks. | Disclose taxonomy-alignment of products. |
Scope
EU reporting perimeter; group rules follow CSRD/accounting consolidation.
In
- Activities with technical screening criteria
- Enabling and transitional activities as defined
Out, or narrower than assumed
- Activities with no criteria yet — not ‘brown by law’
- Sovereigns in some financial KPIs as specified
Operative provisions
| Anchor | Rule | What it does in practice |
|---|---|---|
| Arts 3, 10–18 | Alignment test. | DNSH and safeguards are where files fail. |
| Art 8 | Corporate disclosure. | Templates in the Disclosures Delegated Act. |
Secondary law and guidance
- Climate and environmental delegated acts
- Disclosures Delegated Act
- Commission FAQs — useful, not law
National layer. Supervisors of financial and accounting reports are national. Criteria are Union-wide.
How it sits with other files
Art 8 taxonomy sits inside the sustainability statement.
Minimum safeguards overlap human-rights due diligence.
A retail ‘taxonomy-aligned product’ claim is a consumer-law claim.
Enforcement and private rights
Who
Financial/accounting supervisors; consumer authorities for retail claims.
Tools
Restatements, fines, misleading-claim orders.
Private rights
Securities and consumer litigation.
Risk register
| Risk | Signal | Control |
|---|---|---|
| Marketing overshoot | Consumer ‘green bond’ language vs 12% alignment | Legal review of every retail sentence. |
Open issues
- Omnibus and CSRD perimeter changes who reports.
- Criteria updates.
- Gas/nuclear political risk.
Primary sources
A dictionary of which economic activities count as environmentally sustainable — used in CSRD reports, funds, and green bonds — not a ban on everything else.
You feel it now
Duties are already live.
Next
Climate delegated act in use since 2022; more activities added since
Where it lands
| Channel | People | Companies |
|---|---|---|
| Eligibility vs alignment | A ‘green’ fund should say how much is taxonomy-aligned. That is not the same as ‘will make you money’ or ‘is fossil-free in every holding’. | Most activities are eligible before they are aligned. DNSH and safeguards kill fake alignment. |
| CapEx is the lever | A ‘green’ fund should say how much is taxonomy-aligned. That is not the same as ‘will make you money’ or ‘is fossil-free in every holding’. | A transition plan can be aligned while turnover is not. Do not hide that. |
| Supplier data | A ‘green’ fund should say how much is taxonomy-aligned. That is not the same as ‘will make you money’ or ‘is fossil-free in every holding’. | SMEs get the questionnaire even when they do not report. |
Who gains
Investors who want comparable green claims — if the criteria stay scientific.
Who pays
Reporting corporates and asset managers, in data and assurance.
Who pays
Reporting corporates and asset managers, in data and assurance.
Who benefits
Investors who want comparable green claims — if the criteria stay scientific.
Read the official text