Entry into force of the EU Taxonomy
In July 2020, it came into effect Regulation of the European Parliament and of the Council (EU) 2020/852 of June 18, 2020. on establishing a framework to facilitate sustainable investments, amending Regulation (EU) 2019/2088. In the Polish translation of the regulations, the regulation functions as „systematics,” but the more popular term is „EU Taxonomy.” This regulation is intended to define the conditions under which the activities carried out can be considered environmentally sustainable.
The EU taxonomy applies to financial market participants who offer financial products and companies subject to non-financial reporting requirements (in accordance with Articles 19a or 29a of Directive 2013/34/EU).
Text of the EU Taxonomy Regulation:
What does compliance with the EU Taxonomy mean?
In order to be able to demonstrate compliance with the taxonomy, it is necessary to prove that the activity carried out:
The taxonomy defines six environmental objectives:
- climate change mitigation (CCM);
- climate change adaptation (CCA);
- sustainable use and protection of water and marine resources (WTR)
- the transition to a circular economy (CE);
- pollution prevention and control (PPE);
- protection and restoration of biodiversity and ecosystems (BIO).
Minimum Guarantees
Minimum Guarantees are procedures applied by a business enterprise to ensure compliance with:
- OECD Guidelines for Multinational Enterprises
- UN Guiding Principles on Business and Human Rights, including the principles of the eight fundamental ILO conventions
- The principles and rights set forth in the International Bill of Human Rights.
Minimum Guarantees are assessed at the level of the entire Company, rather than in relation to individual activities. They have been introduced into the Taxonomy to ensure that sustainable development does not come at the expense of fundamental human rights and corporate governance principles. For example, a company that violates human rights, including labor rights, acts in violation of fair competition rules, or engages in corrupt practices cannot be considered sustainable.
Technical Qualification Criteria
In order to assess whether a given activity is environmentally sustainable (taxonomy-aligned), i.e., whether it makes a significant contribution to at least one environmental objective and does not cause serious harm to other environmental objectives, „technical screening criteria” (TSC) should be used.
The technical eligibility criteria are set out in two Commission delegated regulations:
1. Delegated act on climate - Commission Delegated Regulation (EU) 2021/2139 of June 4, 2021, supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing technical qualification criteria for determining the conditions under which an economic activity qualifies as making a significant contribution to climate change mitigation or adaptation, as well as for determining whether that economic activity does not cause serious damage to any other environmental objective, which has been amended three times:
- 2022/1214 (Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, amending Delegated Regulation (EU) 2021/2139 as regards economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards the public disclosure of specific information in relation to those economic activities) – new types of activities have been added (including activities related to nuclear energy production and gaseous fuels)
- 2023/2485 (Commission Delegated Regulation (EU) 2023/2485 of June 27, 2023, amending Delegated Regulation (EU) 2021/2139 establishing additional technical eligibility criteria for determining the conditions under which certain economic activities qualify as making a significant contribution to climate change mitigation or adaptation, and to determine whether such activities do not cause significant harm to any other environmental objectives) – adjustments have been made to the TKK provisions.
- 2026/73 (Commission Delegated Regulation (EU) 2026/73 of July 4, 2025 amending Delegated Regulation (EU) 2021/2178 with regard to simplifying the content and presentation of information on environmentally sustainable activities to be disclosed, and Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486 with regard to simplifying certain technical qualification criteria for determining whether an economic activity does not cause serious damage to environmental objectives) - amendments to Annex I and II.
2. Environmental delegated act„ - Commission Delegated Regulation (EU) 2023/2486 of June 27, 2023. supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing technical qualification criteria for determining the conditions under which an economic activity qualifies as making a significant contribution to the sustainable use and conservation of water and marine resources, to the transition to a circular economy in the prevention and control of pollution, or in the protection and restoration of biodiversity and ecosystems, and determining whether that economic activity does not cause serious harm to any of the other environmental objectives, and amending Commission Delegated Regulation (EU) 2021/2178 with regard to the public disclosure of specific information with respect to these economic activities. The delegated act was amended by Delegated Regulation 2026/73 with regard to Annexes I, II and IV.
Consolidated text of the delegated act on climate:
Text of the delegated act on the environment:
Taxonomy Reporting
For the purposes of reporting on sustainable operations, the so-called „delegated act for Article 8” should be used, thus Commission Delegated Regulation (EU) 2021/2178 of July 6, 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by clarifying the content and presentation of information on environmentally sustainable business activities to be disclosed by companies subject to Article 19a or 29a of Directive 2013/34/EU, and specifying the method for meeting this disclosure obligation (Act as amended by Article 5 and Annexes V-VII of Delegated Regulation 2023/2486 and Delegated Regulation 2022/1214 by Article 2 and Annex III added as Annex XII, and by Article 1 of Delegated Regulation 2026/73). The regulation provides detailed guidance on how to report - definitions of terms, model reporting tables, and rules for disclosure by non-financial (e.g., manufacturing, construction, service) and financial (e.g., credit institutions, investment funds, insurance companies) companies.
Text of the delegated act referred to in Article 8 (consolidated text):
What types of activities are eligible for the EU Taxonomy?
The Climate Delegated Act lists activities that can make a significant contribution to climate change mitigation (found in Annex I of the regulation) or climate change adaptation (found in Annex II).
In contrast, the Environmental Delegated Act, adopted two years later, includes annexes that set out technical eligibility criteria for activities that can make a significant contribution to the environmental goals of: protecting water and marine resources, transitioning to a closed economy, combating pollution, and protecting biodiversity.
How to use Taxonomy?
Due to a number of doubts that have arisen among users of the above provisions, the European Commission has issued a series of documents in the form of frequently asked questions (FAQs) to standardize the practice of applying delegated acts:
- To the Delegated Act on Climate (Commission Notice on the interpretation and implementation of certain legal provisions of the EU Delegated Act on EU Climate Change Systematics establishing technical eligibility criteria for those economic activities that make a significant contribution to climate change mitigation or adaptation and do not cause serious harm to any other environmental objective). The October 20, 2023 clarification can be found here: [EN] [EN]
- The following explanatory documents have been issued for the delegated act referred to in Article 8:
- (July 2021) Commission document containing answers to frequently asked questions „What is the EU Taxonomy Article 8 delegated act and how will it work in practice?” [„What is the delegated act specifying disclosure requirements under Article 8 of the EU Taxonomy Regulation and how will it work in practice?”] [EN]
- (January 2022) Commission service document containing answers to frequently asked questions on how financial and non-financial companies should disclose information on economic activities and assets eligible for classification in accordance with the delegated act specifying disclosure obligations [EN]
- (October 6, 2022) Commission Notice on the interpretation of certain legal provisions of the delegated act specifying the disclosure obligations relating to the notification of economic activities eligible for classification [EN] [EN]
- (October 20, 2023) Commission Notice on the interpretation and implementation of certain legal provisions of the delegated act specifying disclosure obligations under Article 8 of the EU Sustainability Taxonomy Regulation concerning the reporting of economic activities and assets eligible for and compliant with the taxonomy (second Commission Notice) [EN] [EN]
- (November 8, 2024) Commission Notice on the interpretation and implementation of certain legal provisions of the delegated act specifying disclosure obligations under Article 8 of the EU Sustainable Development Taxonomy Regulation concerning the reporting of economic activities and assets eligible for and compliant with the taxonomy (third Commission Notice) [EN] [EN]
- (March 5, 2025) Commission Notice on the interpretation and implementation of certain legal provisions of the delegated act on the Union taxonomy on environmental sustainability, the delegated act on the Union taxonomy on climate change, and the delegated act specifying disclosure requirements for the Union taxonomy [EN] [EN].
Latest changes to the EU Taxonomy
Changes proposed in the Omnibus bill:
- Raising the thresholds for mandatory reporting to large companies with more than 1,000 employees and an annual net turnover exceeding EUR 450 million;
- Introducing the ability to report partial compliance with the Taxonomy for entities with an annual net turnover of less than €450 million.
Attention! The Omnibus Project does not assume direct changes to the Taxonomy Regulation, however, by directly linking the Taxonomy reporting obligation to the Sustainability Reporting Obligation, any changes in the scope of application of the CSRD may also affect the scope of Taxonomy reporting (see Article 1.2.c of Regulation 2019/2088).
Status of changes in force: changes have not yet been implemented. The European Parliament and the Council have voted on a preliminary agreement, which was confirmed by the Parliament on Dec. 16, 2025, and in the next step, in order to take effect, it must be finally confirmed by the Council, published in the Official Journal of the European Union and transposed into national legislation.
Changes introduced by European Commission Delegated Regulation (EU) 2026/73
The European Commission in July 2025 adopted Delegated Regulation (EU) 2026/73, which was published in the Journal of the European Union on January 8, 2026.
Attention! The Delegated Regulation will enter into force on January 28, 2026, after the 20-day vacatio legis. The regulation is applicable as of January 1, 2026. However, companies are left to choose whether for the first period after the changes (for the fiscal year that began between January 1 and December 31, 2025) they will take advantage of the simplifications or still report under the old rules.
The most important changes introduced by the Delegated Regulation
- Introducing financial materiality thresholds of 10% for turnover, capital expenditures (CapEx) and operating expenditures (OpEx). This means that we can exclude from the assessment of compliance with the EU Taxonomy one or the sum of several activities that together do not exceed 10% under each of the three KPIs: turnover, CapEx and OpEx.
- Simplification of DNSH criteria (the „do no serious harm” principle).
- Introducing simplifications in the taxonomy tables (reducing by 64% data points da non-financial enterprises and by 89% for financial institutions).
- Simplifying key performance indicators such as GAR for financial institutions and introducing the possibility for financial institutions not to report individual KPIs for two years.
- Repeal of Annex XII of Delegated Regulation (EU) 2021/2178, which dealt with activities in the natural gas and nuclear energy sectors, which is expected to reduce the reporting burden and avoid duplication of information disclosed by non-financial companies.
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