The financial market participants, such as banks, insurers, and investors are obliged to disclose what portion of their portfolios is taxonomy alignment. The corporations with over 500 staff that already are subject to Non-Financial-Reporting Directive must report on their sustainable investments. The companies that seek to acquire financing from the EU are also required to report on their taxonomy alignment as indeed are the member states themselves when setting public measures or issuing green bonds. Even the companies that are not obliged to report their taxonomy may elect to do so if the advantages from doing so prove to be attractive, particularly as regards raising funds.
The financial companies are to disclose their taxonomy alinement in their periodic reports, pre-contractual disclosures and on their websites before the end of 2021 for Climate Risk Mitigation and Adaptation and by the 2022 for all six objectives. The corporations are to disclose their taxonomy alignment in non-financial statement reports or in dedicated sustainability reports. Their deadlines copy the ones for financial institutions with a one-year delay.
It is assumed it would take about two years for institutions to get sufficiently familiar with taxonomy to include it on their systems. Initially the data is going to be a problem, but the major data providers have already announced projects to increase the relevant data availability – Sustainable Data Alliance.
The users will have to disclose the KPIs on the taxonomy-related economic activity in relation to turnover, capital expenditures and (if applicable) operating expenditures. The revenue from sustainable activities needs to be broken down in percentages. The products/services that are not aligned with taxonomy need also to be disclosed along with statement, that they do not concern the taxonomy regulation.
The investors should calculate their portfolio taxonomy alignment in the following way: