Is your company EU taxonomy ready?
The EU Taxonomy Regulation published in June 2020 clearly aims to make capital flows in the EU sustainable and thus move the entire economy towards sustainability. This has a massive impact on strategy work in different industries and company sizes. Six environmental goals address specific dimensions (read more here). These are broken down into forestry, manufacturing, energy, water supply, construction, real estate, logistics and also services in a streamlined classification system.
“If you can’t measure it, you can’t manage it”
The smart approach in terms of the objectives of the European Green Deal is that everyone needs money. And you only get more of that if you make investments, further developments and projects genuinely sustainable without greenwashing. Already now, the limit values in the different dimensions have been published for the first two environmental targets and more will follow. In this way, sustainability will be measurable and thus controllable in the future – in the spirit of management mastermind Peter Drucker.
Foundation for strategically sustainable decisions
Thus, a sound knowledge of the EU taxonomy also forms an essential basis for making good strategic decisions on relevant issues:
- How sustainable are our products and services?
- From the perspective of the EU taxonomy, what do the existing plants and value-added processes look like? Are we reaching the limits or is there a condition that requires action NOW for tomorrow?
- What questions will banks ask us in the future for genuinely green and thus more favorable financing?
- What opportunities / threats arise from the perspective of additional environmental costs (e.g.CO2 pricing of up to 100 € / ton)?
- Where are concrete steps needed to contribute to the circular economy?
The EU taxonomy is very consistent in assessing whether an investment, project or product is sustainable. An economic activity must have the following characteristics to achieve an appropriate level of sustainability:
- Contribution to the implementation of one of the six key environmental objectives, according to the technical evaluation criteria
- No significant impairment of one or more of these environmental objectives
- Minimum protection in terms of human rights, equal treatment, OECD Guidelines
Supposedly there is still time…
Currently affected by the directive are those who are required to publish non-financial information under EU Directive 2013/34/EU. The gradual extension to all economic operators is only a matter of time. And the time horizon is only a few more years. Therefore, we recommend that you review the direction of your strategy with a view to the comprehensive set of rules of the EU taxonomy.
In addition to the requirements of the market (attractiveness, growth), competencies, maturity and profitability, all strategic focus areas must be reviewed in terms of their long-term contribution to sustainability.
Boldly shape the future now!
Does your business model match the requirements of the taxonomy in terms of embedding in the eco-system and lifecycle impacts? Does your company face risks of massive cost increases because environmental impacts now come with a price? Are there possibilities for timely optimization and adjustment here?
We would be pleased to support you with our expertise in answering such central questions, which will also ensure a successful strategic orientation in the future.