CaseMark Managing EU Taxonomy Compliance
When To Use
- Assessing whether an economic activity qualifies as Taxonomy-aligned under the EU Taxonomy Regulation (Regulation 2020/852)
- Evaluating substantial contribution to one or more of the six environmental objectives
- Applying Technical Screening Criteria (TSC) from the Climate Delegated Act or Environmental Delegated Act
- Conducting Do No Significant Harm (DNSH) analysis across non-target objectives
- Preparing Taxonomy alignment disclosures for SFDR Article 8/9 funds or CSRD/NFRD corporate reporting
- Reviewing Taxonomy eligibility vs. alignment distinctions for portfolio or entity-level reporting
Inputs To Gather
- Activity description: NACE code(s), revenue segments, and capex/opex breakdown for the economic activity under review
- Environmental objective: Which of the six objectives is claimed for substantial contribution (climate mitigation, climate adaptation, water, circular economy, pollution prevention, biodiversity) [VERIFY which Delegated Act applies]
- Technical data: Emissions intensity, energy performance certificates, resource consumption metrics, or other quantitative thresholds relevant to the applicable TSC
- DNSH evidence: Documentation or data addressing each of the remaining five objectives (e.g., climate risk assessments for adaptation DNSH, water management plans, waste hierarchy compliance)
- Minimum safeguards: Confirmation of alignment with OECD Guidelines, UN Guiding Principles on Business and Human Rights, ILO core conventions, and the International Bill of Human Rights
- Reporting context: Whether disclosure is for fund-level (SFDR PAI/periodic reporting), corporate-level (CSRD/NFRD), or investor due diligence purposes
Workflow
Determine Taxonomy eligibility
- Map the economic activity to the relevant NACE sector and Taxonomy activity description
- Confirm the activity appears in the applicable Delegated Act (Climate or Environmental)
- Distinguish between eligibility (activity is listed) and alignment (activity meets all criteria)
Identify the target environmental objective
- Select the primary objective to which the activity claims substantial contribution
- An activity can only count toward one objective to avoid double-counting in KPI calculations
- Pull the specific TSC thresholds from the relevant Delegated Act annex [VERIFY current thresholds — these are periodically updated by the European Commission]
Assess substantial contribution
- Compare the activity's quantitative performance against each TSC threshold (e.g., <100g CO2e/kWh for electricity generation under climate mitigation)
- For transitional activities, verify the activity meets the "best available technology" or "lock-in avoidance" criteria
- For enabling activities, confirm the activity enables substantial contribution in another activity without leading to lock-in of carbon-intensive assets
- Document data sources, measurement methodologies, and any estimation approaches used
Conduct DNSH assessment across remaining objectives
- For each non-target objective, apply the corresponding DNSH criteria from the Delegated Act:
- Climate adaptation: Climate risk and vulnerability assessment conducted per Appendix A methodology
- Climate mitigation: No significant GHG increase from the activity
- Water: Environmental degradation risks addressed per Water Framework Directive requirements
- Circular economy: Waste management aligned with waste hierarchy principles
- Pollution prevention: Activity does not increase pollutant emissions beyond regulatory limits
- Biodiversity: Environmental Impact Assessment completed where required; no degradation of protected areas
- Flag any DNSH criterion lacking sufficient evidence as [VERIFY]
- For each non-target objective, apply the corresponding DNSH criteria from the Delegated Act:
Verify minimum safeguards compliance
- Confirm the entity has due diligence procedures aligned with OECD Guidelines for Multinational Enterprises
- Check for grievance mechanisms consistent with UN Guiding Principles
- Review for adverse human rights, labor, anti-corruption, or tax findings [VERIFY against entity's public disclosures and controversy screening]
Calculate and report Taxonomy KPIs
- Compute Taxonomy-aligned revenue, capex, and opex ratios as applicable
- For fund-level: aggregate across portfolio holdings weighted by investment proportion
- For corporate-level: segment by activity and present numerator/denominator breakdowns
- Apply the mandatory reporting templates per the Disclosures Delegated Act (Annex tables)
Document gaps and escalation items
- List any TSC or DNSH criteria where data is insufficient or methodology is uncertain
- Flag activities near threshold boundaries that may shift with updated data
- Identify where third-party verification or assurance is required [VERIFY — limited vs. reasonable assurance requirements vary by reporting framework]
Output
- Taxonomy Alignment Assessment Report containing:
- Activity-by-activity eligibility and alignment determination
- Substantial contribution analysis with data points mapped to TSC thresholds
- DNSH evaluation matrix (pass/fail/insufficient data per objective)
- Minimum safeguards compliance summary
- Taxonomy-aligned KPIs (revenue %, capex %, opex %) with calculation methodology
- Gap register with recommended remediation actions and data collection priorities
- Disclosure-ready tables formatted per applicable reporting templates
Quality Checks
- Every TSC threshold cited is cross-referenced against the current Delegated Act text [VERIFY — Delegated Acts are subject to amendment]
- DNSH analysis covers all five non-target objectives without omission
- Minimum safeguards assessment addresses all four pillars (human rights, labor, corruption, taxation)
- Eligibility and alignment are clearly distinguished — no eligible-but-unaligned activity is reported as aligned
- KPI calculations use consistent denominators and avoid double-counting across objectives
- All data gaps and estimation methods are transparently disclosed with [VERIFY] markers
- Output references the correct reporting framework (SFDR RTS, CSRD/ESRS, NFRD) for the intended audience