The taxonomy must be a tool that helps companies grow and create jobs, whilst becoming greener.

By Florence Bindelle, Secretary General EuropeanIssuers

The EU Taxonomy Regulation, a cornerstone of the European Commission’s Green Deal, was first introduced on December 18, 2019, as part of the Action Plan on Sustainable Finance unveiled in March 2018. Aimed at shaping the classification of economic activities based on environmental sustainability, it sets criteria to combat greenwashing, especially in key sectors like energy, transportation, and agriculture. In line with the Regulation, financial institutions are mandated to disclose the percentage of their investments aligned with this taxonomy, in a way that fosters transparency and propels the growth of green finance. In essence, it stands as a foundation in the EU’s dedicated push towards a sustainable and low-carbon economy by being that supportive tool that encourages companies to integrate sustainability into their operations. Thus, as the title of this article reads, the Taxonomy must (or should?) be a tool that helps companies grow and create jobs, whilst becoming greener.

At EuropeanIssuers, we have, and continue, to closely follow every development of the sustainable finance agenda, hence, including the Taxonomy. We consider that the EU Taxonomy could help accelerate the transition to a net zero carbon economy by 2050, while sharing the ambition of the European Green Deal.

However, our experience at EuropeanIssuers reveals a consensus among companies that the Taxonomy is a complex tool insufficiently capable of addressing the main challenge of financing the transition.

Diving into national reports on Taxonomy implementation, from our members, uncovers further challenges. Data shows that approximately 50% of companies struggle with Art. 8 Delegated Act tables, leading to navigation in the dark. Additionally, disclosures, particularly on gas and nuclear activities, are lacking, with many companies seemingly unaware of Art. 8 DA amendments. Our analysis also underlined gaps in compliance with Minimum Safeguards and Technical Screening Criteria, pointing to a lack of due diligence understanding, unclear guidance, and ambiguous activity scopes.[1]

The reason behind this evidence can be identified in the intricacy and complexity of the Regulation itself, resulting in diverse interpretations among companies, auditors, and supervisory entities. Additionally, we attribute this complexity to the EU Taxonomy’s limited scope. Similarly, another current challenge is that numerous companies are unable to report their alignment or eligibility because the primary focus of their business is not covered by the issued Delegated Act.

Within this picture, we have also witnessed how the Technical Screening Criteria further contributes to uncertainties with numerous loopholes, as the absence of a standardized methodology for climate-related physical risks adds to the complexity.

Thus, resulting in limited avenues for interpretative recourse amplification of interpretational disagreement.

On the other hand, on a brighter note an in-depth analysis of turnover, CapEx, and OpEx within the Taxonomy framework, reveals how the CapEx Key Performance Indicator (KPI) stands out as a crucial tool for reporting entities and investors[2]. CapEx emerges as the most significant metric in terms of both alignment and eligibility, with a striking 89% of sampled companies declaring an aligned CapEx KPI. The average alignment reaches 20%, reflecting the Taxonomy Regulation’s expansive definition of CapEx, allowing companies to scrutinize CapEx linked to eligible activities, individual measures, and CapEx Plans. Oppositely, OpEx KPI presents distinct challenges, being the most problematic of the three. Despite 59% of sampled companies declaring an aligned OpEx, its average alignment is 12%, and its average eligibility is 29.7%. The reason behind these results may be identified in the narrow definition of OpEx by the Taxonomy Regulation prompting companies to utilize the materiality exemption, limiting its scope. While the analysis of Turnover reveals a relatively smooth landscape, with 70% of sampled firms publishing an aligned Turnover. On average, this aligned Turnover constitutes 15% of the Taxonomy.

Drawing on this evidence, EuropeanIssuers acknowledges the benefits of the Taxonomy and recognizes its potential to empower issuers by providing a tool that fosters growth, job creation, while achieving environmental sustainability. However, amidst this recognition, we also acknowledge the inherent complexity of the Taxonomy.  Nonetheless, despite these challenges, we still consider the Taxonomy as an ongoing journey.

The evidence may prompt a critical question regarding the Taxonomy’s efficacy in facilitating a genuine transition, nonetheless a glimmer of hope emerges in the form of the CapEx Key Performance Indicator (KPI).

This metric is proving to be a crucial tool for both reporting entities and investors, offering clarity and alignment in the complex landscape of sustainable finance. In conclusion, the EU Taxonomy stands can be an essential tool to support the construction and transition toward a robust and sustainable EU economy.


EuropeanIssuers is a pan-European organisation representing the interests of publicly quoted companies across Europe to the EU Institutions. Our members include both national associations and companies from all sectors in 15 European countries, covering markets worth € 7.6 trillion market capitalisation with approximately 8000 companies.

We aim to ensure that EU policy creates an environment in which companies can raise capital through the public markets and can deliver growth over the longer-term. We seek capital markets that serve the interests of their end users, including issuers.

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[1] PwC, 2023, “EU Taxonomy reporting 2023: Data quality and comparability still low – even within sectors” Available at:

Chiara Laurre for Afep, 2023, “Implementation of the EU Taxonomy Regulation u How are French companies coping with the first year of alignment disclosure”. Available at:

[2] Chiara Laurre for Afep, 2023, “Implementation of the EU Taxonomy Regulation u How are French companies coping with the first year of alignment disclosure”. Available at: