The EU Taxonomy and the role of Environmental Consultants

Jul 6, 2023 | Environment, News | 0 comments

By George Byrne

Q: Who does the EU Taxonomy apply to?

The EU taxonomy is a classification system created by the European Union to define environmentally sustainable economic activities. It applies to a wide range of entities and participants in the financial sector. Here are the main groups to which the EU taxonomy applies:

  1. Companies: The EU taxonomy applies to companies operating within the EU that are required to disclose non-financial information under the Non-Financial Reporting Directive (NFRD). It affects large public-interest entities with more than 500 employees.
  2. Financial Market Participants: The EU taxonomy applies to financial market participants, including asset managers, investment firms, insurance companies, pension funds, and other institutional investors operating within the EU. These participants are subject to disclosure obligations regarding the sustainability aspects of their investments.
  3. Financial Products: The EU taxonomy applies to financial products offered or marketed within the EU. This includes investment funds, bonds, and other financial instruments that promote their environmental sustainability based on the taxonomy criteria.
  4. Member States: The EU taxonomy is implemented by individual EU member states, which are responsible for integrating the taxonomy into their national legislation and ensuring compliance within their jurisdictions.

It’s important to note that the EU taxonomy is being rolled out gradually, with different sectors and activities being included over time. The taxonomy aims to create a common framework for determining environmentally sustainable economic activities and promoting sustainable finance within the European Union.

Q: How can Environmental Consultants help other companies be taxonomy aligned?

Environmental testing companies can play a crucial role in helping other companies align with the EU taxonomy requirements. They offer various services that assist companies in assessing and measuring their environmental performance and compliance. Here are some ways in which environmental testing companies can support companies in achieving taxonomy alignment:

  1. Environmental Impact Assessments: Environmental Consultants can conduct comprehensive assessments to evaluate a company’s environmental impact. They can assess factors such as energy consumption, waste generation, water usage, greenhouse gas emissions, and pollutant discharge. These assessments help companies identify areas that need improvement to meet the taxonomy’s environmental performance criteria.
  2. Sustainability Audits: Environmental Consultants can perform sustainability audits to assess a company’s overall sustainability practices and policies. They evaluate various aspects, including resource management, supply chain practices, waste management, environmental management systems, and compliance with environmental regulations. The audits provide insights and recommendations for companies to enhance their sustainability performance and align with the taxonomy requirements.
  3. Data Collection and Analysis: Environmental Consultants can assist companies in collecting and analysing relevant data required for taxonomy alignment. They can develop customized data collection strategies, implement monitoring systems, and analyse data to quantify a company’s environmental impacts. This data is essential for companies to track their progress, set targets, and report on their environmental performance as per the taxonomy guidelines.
  4. Compliance Testing: Environmental Consultants can perform specific tests to ensure compliance with environmental regulations and standards. They can conduct analyses to measure air quality, water quality, soil contamination, and hazardous substance management. By verifying compliance, companies can demonstrate their adherence to environmental requirements and improve their chances of taxonomy alignment.
  5. Certification and Verification: Environmental Consultants can provide certification and verification services to validate a company’s environmental claims and achievements. They can assess and certify specific products, processes, or operations as environmentally sustainable, helping companies demonstrate their alignment with the taxonomy. Certification and verification services add credibility and transparency to a company’s sustainability efforts.
  6. Training and Consultancy: Environmental Consultants can offer training programs and consultancy services to help companies understand and navigate the complexities of the EU taxonomy. They can educate companies on the taxonomy requirements, assist in developing sustainability strategies, and provide guidance on implementing best practices to achieve alignment.

Overall, environmental consultants and testing companies bring specialised expertise in environmental assessment, monitoring, and compliance. They offer a range of services that support companies in measuring, improving, and demonstrating their environmental performance, thereby aiding taxonomy alignment efforts.