The Taxonomy is not a sustainability report. It is an accounting exercise with an environmental test attached.
Three KPIs, each a proportion of a financial total, each requiring every euro in the numerator to survive four separate tests. EcoLedger runs the classification, holds the evidence and reconciles the result back to your accounts.
Four gates. An activity has to pass all of them.
Most of the argument in a Taxonomy assessment is about where an activity failed, and being able to say precisely which gate it failed at is what makes the number defensible.
Does it appear in the Delegated Acts as an economic activity described under one of the six environmental objectives? Eligibility is a matter of description, not performance, and an eligible activity is not yet an aligned one.
Does it meet the technical screening criteria for its objective? This is where measured thresholds apply, and where the evidence has to be specific to the asset or the activity rather than to the company as a whole.
Does it avoid significant harm to each of the other five objectives? A single DNSH failure removes an activity from the aligned figure however strong its substantial contribution is.
Is the company aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? This test applies at company level, so it can remove every activity at once.
Aligned proportion, disclosed alongside the eligible proportion
Aligned proportion, including activities on a CapEx plan
Aligned proportion of the defined OpEx numerator
Every KPI is a fraction. The denominator has to tie back to the accounts.
Taxonomy disclosure fails review for accounting reasons far more often than for environmental ones. A numerator nobody can trace, or a denominator that does not reconcile, is the usual finding.
Net turnover derived from products and services associated with Taxonomy aligned economic activities.
Total net turnover for the period, taken from the financial statements.
Additions to tangible and intangible assets that relate to aligned activities, or that form part of a plan to expand or upgrade toward alignment.
Total additions to tangible and intangible assets in the period, before depreciation and revaluation.
Direct non capitalised costs relating to aligned activities, within the defined categories.
Total direct non capitalised research and development, building renovation, short term lease, maintenance and repair costs.
In EcoLedger each activity carries the financial line it was drawn from, so a reviewer can move from a percentage in the disclosure to the underlying figure in the accounts without a separate working paper.
Start with what you actually have to publish.
The Article 8 disclosure with all three KPIs, the eligible and aligned proportions, and the assessment behind every activity included in the numerators.
- KPITurnover, CapEx and OpEx, eligible and aligned, in the required templates
- ACTIVITYEvery activity assessed, with the objective it contributes to
- TSCTechnical screening criteria tested, with the measured evidence recorded
- DNSHDo no significant harm assessed against the other five objectives
- MSSMinimum social safeguards, assessed at company level
- BINDERAn assessment binder a reviewer can work through activity by activity
How the Taxonomy assessment gets built.
Split the business into economic activities.
The assessment begins as a mapping exercise: which parts of the business correspond to which activities in the Delegated Acts, and how turnover, additions and defined costs split across them without being double counted.
- Activity mapping across the six environmental objectives
- Financial lines allocated to activities, with no double counting
- Eligible and non eligible proportions calculated separately
- Group structure held, so entities can be assessed and then consolidated
Test the criteria, and keep the evidence.
Each activity is tested against its technical screening criteria, then against DNSH for the other five objectives, with the measurement, the source and the supporting document recorded against each test rather than summarised afterwards.
- Technical screening criteria from the Delegated Acts, by activity
- DNSH assessed objective by objective
- Minimum safeguards assessed at company level
- Evidence attached to the individual test, not to the activity as a whole
Produce the templates and the binder behind them.
The KPIs are produced in the required disclosure templates, alongside an assessment binder that lets a reviewer follow any percentage back to the activity, the test and the document that supports it.
- Turnover, CapEx and OpEx templates
- Eligible and aligned proportions disclosed together
- Assessment binder exported for review
- Word and Excel output
Classify. Assess. Disclose.
See how an activity is traced from KPI back to evidenceFewer filers. The same lenders asking the same question.
Taxonomy disclosure applies to companies within the scope of CSRD, and the Omnibus simplification narrowed that population considerably. What it did not narrow is the number of banks, investors and public funders that ask for the aligned proportion of turnover or capital expenditure before they price anything.
Large EU undertakings above the higher thresholds continue to disclose the three KPIs under Article 8.
Companies preparing first disclosures may now be able to defer, or may be outside the requirement entirely.
Lenders, investors and grant funders continue to request the KPIs, whether or not there is an obligation to publish them.
A Taxonomy number without an assessment behind it is a number you cannot defend when it is questioned.
Taxonomy reporting in EcoLedger.
- Six environmental objectives
- Delegated Acts activity list
- Technical screening criteria
- DNSH assessment
- Minimum social safeguards
- Turnover KPI
- CapEx KPI, including CapEx plans
- OpEx KPI
- Eligible and aligned proportions
- Reconciliation to the accounts
- Assessment binder
- Word and Excel output
What is the difference between eligible and aligned?
An activity is eligible if it appears in the Delegated Acts as a described economic activity. It is aligned if it also meets the technical screening criteria for a substantial contribution, does no significant harm to the other five objectives, and the company satisfies the minimum social safeguards. Both proportions are disclosed, and the gap between them is often the most informative part of the disclosure.
Which environmental objectives are covered?
All six: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.
How do the KPIs reconcile to our financial statements?
Each KPI is a proportion of a financial total taken from the accounts: net turnover, additions to tangible and intangible assets, and a defined subset of non capitalised costs. In EcoLedger each activity carries the financial line it was drawn from, so a reviewer can trace a percentage back to the underlying figure without a separate working paper.
What happens when the criteria change?
The criteria are updated as the Delegated Acts are amended. Prior year assessments keep the criteria version they were prepared under, so a change in the rules is visible as a change rather than as an unexplained movement in the KPI.
Who still needs to report?
Taxonomy disclosure applies to companies within the scope of CSRD, and the Omnibus simplification narrowed that scope to the largest undertakings. Companies outside it often still produce the KPIs because lenders, investors and public funders request them. Confirm your position with your advisers.
Bring one activity you are unsure about. We will take it through all four gates.
Bring a revenue line, a capital project or a prior year assessment you were never comfortable with. We will map it into the EcoLedger process and show you where it passes, where it fails and what evidence the difference requires.
