The EU taxonomy – advice, strategy and reporting

Does your organization need to report in accordance with the new EU taxonomy? We help you understand what the new regulation means and how you can create effective digital processes for the reporting requirements included in the taxonomy.

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What does the EU taxonomy mean?

The EU taxonomy is part of the European Commission's action plan on financing sustainable growth, with encouraging development in line with the UN Sustainable Development Goals and the Paris Agreement. The taxonomy is a tool to steer private investments to sustainable companies and defines what is green business activities.

If your operations are affected by the regulation, you need to disclose how large a proportion of the operation’s turnover for the fiscal year that is sustainable under the taxonomy criterias. The taxonomy’s KPIs in the Sustainability Reporting provide an indication of how green your company is and how much you are investing in transforming your operations. The KPIs are comparable between companies within the same sector and there is also a requirement that a third party reviews the company’s reports. The EU taxonomy aims to increase transparency and prevent greenwashing.

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Taxonomy reporting – we help you, step by step

Knowit works with many companies that report in accordance with the EU taxonomy and has cutting-edge expertise in sustainability, EU legislation, data collection, reporting, and digitalization of processes. We have long experience of planning, operating, and implementing digital solutions that both automate and streamline operations.

Here’s how we can support you, whether you are a sustainability manager, CFO, or in charge of any of the following:

 

  • Goals, strategy, and plan of action – what does the taxonomy mean for your company?
  • Analysis of any gaps in your current sustainability efforts and what will be needed under the taxonomy and future regulations (such as the new Corporate Sustainability Reporting Directive, CSRD)
  • Screening of business activities (eligible and aligned) using the taxonomy compass
  • Data collection and evaluation of digital platforms
  • Support in setting up the KPIs turnover, Capex and Opex 
  • Implementation of digital platforms, integration with business systems, and adaptation of internal processes

CSRD – how to prepare for the new directive

What is CSRD, and what does it mean? 

The Corporate Sustainability Reporting Directive, CSRD, is the new EU directive aimed at improving the quality of corporate sustainability reporting, to increase transparency and comparability across the entire European market. 

Similarly, to the Taxonomy, the purpose of CSRD is, through solid and comparable reporting of all relevant sustainability data, to steer companies and capital towards a faster pace of transition to meet the EU's strategic goals and vision of a climate neutral economy by 2050. The directive holds a comprehensive list of requirements for disclosures, and standards on reporting and auditing of all relevant sustainability areas. It contains 1144 potential data points, both quantitative and qualitative, that companies may need to report on. 

The directive will be implemented from the financial year 2024, with first reports published in 2025, and replaces the current legislation in the Non-Financial Reporting Directive (NFRD). All large companies and all listed companies within the EU (except listed micro-enterprises) are covered by this new reporting regime. 

How to prepare for the reporting directive 

If you are to report according to CSRD, our sustainability strategists, change managers and lawyers can help you prepare for the new requirements, which place significant demands on processes, goal setting, data collection, and traceability of data. These are five important preparations we can help you with: 

 

  1. Provide a basic understanding and grounding for your organization and management about what CSRD is and what the directive means for your company. 
  2. Conduct a gap analysis of your current sustainability work and what is missing before the CSRD requirements go into effect for your organization. 
  3. Prepare and develop a process for the double materiality analysis. 
  4. Review the processes to map the conditions for data collection and evaluate digital support, both existing and new. 
  5. Collect data and implement digital supports. 
  6. Develop a plan and roadmap for the integration of CSRD into the company's business strategy, goals, and operations. 
green peas

Use digitalization to create reliable and effective sustainability measures

An automated work method and digital support will be a requirement for dealing with the taxonomy’s and CSRD’s requirements on data that must be collected, processed, analyzed, reported, and traceable.

By reducing manual, costly processes and investing in digitalization, you can easily gather data regarding your sustainability work and report in accordance with the new regulations. Furthermore, digitalization gives you the ability to regularly follow up and evaluate value-promoting KPIs in sustainability, in the same way that you follow up profitability goals at business meetings. Continuous collection of correct data is a prerequisite for forward-looking value-driven work to attract customers and investors.

Knowit provides support and advice to create automated digital flows that streamline your sustainability work. Whether you just want to comply with the regulations or be an industry leader, we can deliver a total solution: consultancy, data collection, a digital platform, and implementation that is appropriate for your operations and circumstances. 

Discuss your taxonomy questions with our sustainability strategists and taxonomy experts

Do you have any questions about the EU taxonomy, reporting requirements, or digital tools that make reporting easier? Feel free to ask us anything!

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Christel Holmquist
Sustainable Business
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Johanna Wallnäs
Digital sustainability strategist and specialist in law, including the EU taxonomy
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