EU: Commission Notice on certain legal provisions under the Taxonomy Regulation

A Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated At under Article 8 of the EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets was published in the Official Journal of the EU on 8 November 2024.

The purpose of the Commission Notice is to provide further interpretative and implementation guidance to financial undertakings in the form of replies to FAQs on the reporting of their key performance indicators (KPIs) under Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing the Taxonomy Regulation.

The Notice:

• Covers the reporting obligations of large financial undertakings and financial undertakings admitted to trading on EU markets relating to how they finance, invest in or insure taxonomy-aligned activities.
   
• Clarifies the scope of entities subject to the reporting obligations, the taxonomy assessment of specific exposures such as to retail clients, local authorities and exposures to individual undertakings and groups.
   
• Considers the rules regarding the verification and evidence of compliance with the EU taxonomy, and targeted questions specifically related to credit institutions, insurance undertakings and asset managers.

The replies to the FAQs in the Notice clarify the rules in the applicable legislation and do not introduce any additional requirements.

The Commission Notice published on 8 November 2024 is available here.

On 20 October 2023, two related Commission Notices were published in the Official Journal of the EU:

• Commission Notice (First Notice) on the interpretation and implementation of certain legal provisions of the Taxonomy Climate Delegated Act establishing technical screening criteria (TSC) for economic activities that contribute substantially to climate change mitigation or climate change adaptation and do no significant harm to other environmental objectives.

• Commission Notice (Second Notice) on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act ((EU) 2021/2178) under Article 8 of Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets.