Taxonomy of investments

What is investment taxonomy and why does it matter for business?

The taxonomy is a set of EU regulations that define sustainability criteria for economic activities and investments carried out within the European Union. These regulations are a key component of the European Green Deal and aim to establish a unified framework that enables an objective assessment of investments in terms of their environmental impact and compliance with ESG (Environmental, Social, Governance) standards.

Thanks to the taxonomy, entrepreneurs, investors and financial institutions can clearly determine whether their activities genuinely support the EU’s environmental objectives and minimise negative effects on the climate and ecosystems. The taxonomy also enhances market transparency by reducing the risk of greenwashing.

The environmental objectives of the EU taxonomy

For an economic activity or investment to be considered sustainable under the taxonomy, it must contribute to at least one of the six environmental objectives:

Climate change mitigation;
Climate change adaptation;
Protection of water and marine resources;
Transition to a circular economy;
Pollution prevention;
Protection and restoration of biodiversity and ecosystems, while not causing significant harm to any of the other objectives.

How to assess whether a project aligns with the taxonomy objectives?

To verify if a project meets the taxonomy requirements, so-called technical screening criteria are applied, which have been precisely defined for specific types of economic activities. These criteria are intended to allow an objective evaluation of whether a given investment makes a substantial contribution to one of the six environmental objectives while avoiding significant harm to the others.

The technical criteria include aspects such as:

energy consumption and energy efficiency,
types of materials used,
waste management,
water conservation.

A detailed set of technical screening criteria has already been adopted for the first two environmental objectives. The remaining four are currently under development, with specific requirements to be introduced soon.

EU taxonomy – new challenges for business

Implementing the taxonomy poses a significant challenge for many businesses, particularly those operating in sectors with high environmental risk. The regulations may affect several areas:

Reporting obligations – companies covered by the taxonomy will be required to disclose activities that comply with sustainability criteria.

Access to financing – financial institutions and investors increasingly rely on taxonomy criteria when assessing projects, which may significantly affect access to capital and financing terms.

Tax incentives and preferences – some tax incentives in EU member states are expected to be linked to compliance with taxonomy principles.

It is also likely that in the future, taxonomy-related obligations will be extended to additional sectors and entities. Therefore, businesses should begin preparing for the potential implementation of new regulations, including assessing whether their operations align with taxonomy criteria.

What does the Omnibus package mean for the taxonomy?

The Omnibus package does not represent a withdrawal from the Green Deal’s objectives regarding ESG reporting. On the contrary, ESG reporting and the taxonomy remain a priority on the EU regulatory agenda. The changes are primarily aimed at optimising and adjusting the framework to make the reporting obligation less burdensome for businesses.

How can we help you?

We specialise in sustainability advisory services and investment taxonomy. We closely monitor regulatory developments and their impact on business operations in Poland and across the EU.

Our services include:

analysis of business compliance with taxonomy criteria,
identification of reporting obligations arising from the taxonomy,
advisory on investment planning with consideration of environmental aspects.