EC adopts delegated regulation to simplify EU taxonomy reporting and screening criteria

The European Commission has adopted a Delegated Regulation amending Delegated Regulation (EU) 2021/2178 to simplify reporting requirements for environmentally sustainable activities under the EU Taxonomy Regulation. It also amends Delegated Regulations 2021/2139 and 2023/2486 to simplify certain technical screening criteria for determining whether economic activities cause no significant harm to environmental objectives.

Key simplification measures include:

• Financial and non-financial companies will no longer be required to assess Taxonomy eligibility or alignment for economic activities that are not financially material to their business. For non-financial companies, this exemption will apply to activities representing less than 10% of total revenue, capital expenditure (CapEx) or operational expenditure (OpEx).
• Non-financial companies will also be exempt from assessing Taxonomy alignment for their entire OpEx when it is considered immaterial to their business model.
• For financial institutions, key performance indicators (KPIs) such as the Green Asset Ratio (GAR), will be simplified. Institutions will also be given an option not to report detailed Taxonomy KPIs for a period of two years.
• Reporting templates will be streamlined, reducing the number of required data points by 64% for non-financial companies and 89% for financial companies.
• The technical screening criteria for determining whether economic activities cause no significant harm—related to pollution prevention and control, including the use and presence of chemicals—will also be simplified.

The Delegated Regulation will now be subject to scrutiny by the European Parliament and the Council of the EU. If no objections are raised, it shall enter into force on the twentieth day following its publication in the Official Journal of the European Union and will apply from 1 January 2026.

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