One important step of the EU Taxonomy reporting process is to report on three different KPIs. Companies must disclose the proportion of their turnover, capital expenditures (CapEx), and operating expenditures (OpEx) of each economic activity that is taxonomy-eligible and taxonomy-aligned.
The turnover of EU Taxonomy-aligned activities
Net turnover refers to the amounts derived from the sale of products and services after the deduction of sales rebates, value-added tax, and other taxes directly linked to turnover (The Accounting Directive, 2013/34/EU). To calculate the EU Taxonomy-compliant proportion of turnover, a company must divide the total EU Taxonomy-aligned turnover by the total net turnover. If a company has an economic activity that contributes to more than one environmental objective, then the respective turnover must be split between each of the objectives to avoid double counting.
The CapEx of EU Taxonomy-aligned activities
CapEx is classified as additions to tangible and intangible assets during the financial year. Including:
Property, plant, and equipment (IAS 16)
Intangible assets (IAS 38)
Investment property (IAS 40, several points)
Agriculture (IAS 41)
Leases (IAS 16)
To comply with the EU Taxonomy regulation, companies are required to disclose the current (and planned) proportions of their capital expenditure related to assets or processes associated with either taxonomy-aligned economic activities.
To calculate the EU Taxonomy-compliant proportion of turnover, a company must divide the total CapEx of the EU Taxonomy-aligned activities by the total net CapEx. Again, if a company has an economic activity that contributes to more than one environmental objective, then the corresponding CapEx must be split between each of the objectives to avoid double counting.
The OpEx of EU Taxonomy-aligned activities
OpEx is direct expenditures relating to the day-to-day servicing of assets of the property, plant, and equipment that are necessary to ensure the continued and effective use of such assets (e.g., research and development, building renovation measures, short-term lease, maintenance, and repair).
The OpEx of taxonomy-aligned activities relates to expenditures that are:
related to assets and processes associated with taxonomy-aligned economic activities, including training and other human resources adaptation needs, and direct non-capitalized costs that represent research and development,
part of the CapEx plan, or
related to the purchase of output from taxonomy-aligned economic activities and individual measures enabling the target activities to become low-carbon or to lead to GHG reductions, provided that the measures are operational within 18 months (2021/2178/EU).
What do the EU Taxonomy-aligned share of turnover and CapEx imply?
When a company publishes its EU Taxonomy-aligned share of turnover, it gives a clear picture of where that company currently stands in relation to the EU sustainability goals. It allows investors to determine the percentage of their funds invested in taxonomy-aligned activities. CapEx, on the other hand, gives investors a sense of a company's direction. It allows them to assess the credibility of a company's strategy, and it makes it easier to realize whether they agree with a company's strategic approach.
|In addition to the three KPIs, companies shall disclose accompanying qualitative information about the calculation and key elements of KPIs outlined in the Disclosures Delegated Act (2021/2178/EU). The requirements are described in detail in the following article: 4 steps to report on the EU Taxonomy|