Reporting requirements under the Taxonomy Regulation (Art.8) - BusinessEurope comments

Key messages

• This paper summarises the main questions and concerns that companies have in the context of the reporting requirements under Article 8 of the Taxonomy Regulation. We expect it will inform the European Commission when drafting its proposal for a Delegated Act (DA).
• Although companies have a long experience in performing reporting exercises, the new Taxonomy’s disclosure requirements will inevitably disrupt their current accounting and reporting systems. The future reporting obligations will intervene in an already well-regulated area and impose significant additional costs due to the establishment of new reporting processes and structures and the implementation of (new) IT systems. These new reporting obligations will also occur at a time when companies’ resources are mobilised to manage the impacts of the pandemic crisis. Hence, the importance to make sure corporate reporting requirements are proportionate and fit for purpose.
• In seven specific areas, we expect the Art. 8 DA will bring further clarity:
  • Disclosure obligations should be aligned with the information provided in the companies’ financial statements, thus limiting Taxonomy’s additional costs and burdens.
  • Providers should be granted a sufficient level of flexibility on how to report on their proportion of turnover, CapEx, OpEx related to environmentally sustainable activities (e.g. structure of the report, format).
  • Reporting requirements for climate change mitigation and climate change adaptation objectives should be delayed until the financial year 2022.
  • Reporting obligations should not negatively affect the companies’ competitive advantage, by requiring businesses to disclose confidential information or trade secrets.
  • Disclosure of Taxonomy’s indicators should be made at the level of the group, and not per specific sustainable objective and/or economic activity.
  • Companies should not be required to disclose the metrics for economic activities which are not covered by the Taxonomy or for which the criteria are not met.
  • The Commission should set up as soon as possible a helpdesk to respond to practical reporting questions from companies, and ultimately support data quality and comparability.