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Guide To The EU Taxonomy Regulation 

The EU Taxonomy defines what counts as sustainable in the EU — shaping the future of finance, compliance, and corporate responsibility. Learn how your business can align, disclose, and lead in the green transition.

Taxonomy Compliance Checklist

Understanding The EU Taxonomy Regulation

 

EU Taxonomy is the European Union’s flagship tool for driving capital toward environmentally sustainable investments. It sets clear criteria to define what counts as “green” — and ensures that companies, investors, and policymakers can speak the same language when it comes to sustainability.

If your business operates in the EU or seeks EU-based funding, the Taxonomy may already affect your reporting, financing, and investment decisions.

 

The EU Taxonomy is a science-based framework that defines which economic activities can be considered environmentally sustainable under EU law. It's a framework that

Helps investors identify green investments

Prevents greenwashing

Aligns private capital with the EU Green Deal and climate goals

The overarching conditions an economic activity must meet to qualify as environmentally sustainable: 

EU Taxonomy - criteria to qualify as environmentally sustainable

Who Does EU Taxonomy Apply To?

  • Large companies (under the Corporate Sustainability Reporting Directive / CSRD)

  • Financial market participants offering sustainable investment products

  • EU institutions (e.g., the European Investment Bank)

  • Non-EU companies marketing sustainable funds in the EU

If your company is in a covered sector, you must disclose your alignment with the Taxonomy.

 

What Activities Are Covered By The Regulation?

The Taxonomy includes over 100 activities across sectors like:

  • Energy

  • Manufacturing

  • Transport

  • Construction and real estate

  • Agriculture and forestry

  • Waste and water

  • ICT and R&D

 

The 6 Environmental Objectives

 

 

Climate change mitigation

Climate change adaptation

The sustainable use and protection of water and marine resources

The transition to a circular economy

Pollution prevention and control

The protection and restoration of biodiversity and ecosystems

EU Tentative Timeline

Timeline EU Taxonomy Regulation

Why It Matters ?

The EU Taxonomy is becoming a global benchmark for sustainable finance. It will affect:

Access to green finance

Investment attractiveness

Corporate reputation and transparency

Key Requirements 

Check If Your Activities Are Covered

Use the EU's official activity list and screening criteria (official list of economic activities and their corresponding delegated acts defined under EU Taxonomy). 

Assess Alignment

Determine if your activities meet the technical screening criteria and do no significant harm (DNSH).

Gather And Structure Your Data

% of Turnover from Taxonomy-eligible and Taxonomy-aligned activities

% of CapEx and OpEx contributing to those activities

Narrative explanations of:

How alignment was determined

Data sources and assumptions

How the "Do No Significant Harm" and "Minimum Safeguards" criteria were verified

Prepare Disclosures

Integrate Taxonomy alignment into sustainability and financial reporting (especially if CSRD applies)

Engage Your Supply Chain

Work with suppliers and partners to obtain reliable sustainability data.

The Farmer Connect Solution Benefits 

Centralised ESG & Impact Data
Collect and manage sustainability data — from carbon footprint to human rights risk — in one traceable, structured system. 
Map Economic Activities to Eligible Sectors
Quickly identify and tag operations that fall under Taxonomy-eligible sectors (e.g., agriculture, manufacturing, transport), setting the stage for compliance and reporting.
Supply Chain Risk Transparency
Support “Do No Significant Harm” (DNSH) assessments and minimum social safeguards by tracing supplier practices, origins, and risk flags throughout the chain.
Simplified Reporting Readiness
Feed aligned KPIs (% turnover, CapEx, OpEx) into reporting with confidence, using structured, verified datasets drawn directly from your operations and partners.
EU Taxonomy Guide

📘 Download Your EU Taxonomy Checklist

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