Skip to main content
Knowledge about ESG

The EU Taxonomy – a common language for sustainability

The EU taxonomy is a green classification system that creates a common language around climate and environmentally sustainable activities. The taxonomy helps ensure that investments support the EU's green transition goals.

A green classification system

The EU Taxonomy for Sustainable Activities is a green classification system that translates six key European climate and environmental objectives into clear criteria for specific economic activities, primarily for investment purposes.

It establishes a common language for defining climate and environmentally sustainable activities, helping to ensure that future investments increasingly support the green transition.

In short, eligible activities must contribute to the overarching goal of achieving net-zero emissions by 2050.

Sustainable finance

Sustainable finance refers to the integration of environmental, social, and governance (ESG) considerations into investment decisions across companies and the financial sector.

Achieving this requires a shared understanding of what qualifies as sustainable — and the EU Taxonomy for Sustainable Activities plays a key role in providing that clarity.

For companies subject to the EU Taxonomy, reporting obligations will apply, and in the future, these disclosures will be included in the management report as part of the sustainability reporting requirements.

However, a much broader group of companies can also benefit from using the taxonomy strategically — as a guide for improving market access, attracting capital, and identifying opportunities that support a greener business direction.

The six climate and environmental objectives of the EU Taxonomy

(Graphic currently only in Danish)

In June 2021, the criteria for the first two environmental objectives — Climate Change Mitigation and Climate Change Adaptation — were adopted. Large companies operating in sectors covered by the EU Taxonomy are already required to report on these.

In late July 2023, the criteria for the remaining four environmental objectives were finally adopted.

Podcast about the EU Taxonomy

In the podcast series Do No Significant Harm, we share both experiences and concerns. We speak with our own experts and seek inspiration beyond our office walls — always with the goal of making ourselves, and you, a little wiser.

Listen to the podcast Do No Significant Harm (in Danish)

Start your morning with a coffee briefing on the EU Taxonomy

Three criterias for sustainability

To be considered environmentally sustainable, an economic activity must meet all of the following criteria:

  1. Substantial Contribution (S.C.)
    It must contribute significantly to at least one of the six environmental objectives.
  2. Do No Significant Harm (D.N.S.H.)
    It must not cause significant harm to any of the other environmental objectives.
  3. Minimum Social Safeguards
    It must be carried out in alignment with minimum guarantees for social responsibility — reflecting the S and G in ESG (Environmental, Social, and Governance).

Read more about the EU taxonomy here

Who is covered by the Taxonomy?

Not all companies are subject to the requirements from the beginning. However, more companies will be included progressively and will therefore be obliged to follow the guidelines over time.

The timeline for inclusion is as follows:

  1. 2021 – Listed companies with more than 500 employees
  2. 2025 – Listed companies (Accounting Class D) with more than 250 employees and Unlisted companies (Accounting Class C) with more than 250 employees
  3. 2026 – Small listed companies
  4. 2028 – Non-EU companies with subsidiaries or branches in the EU

This phased timeline reflects changes introduced in the European Commission’s Omnibus Proposal.

Watch the webinar about the omnibus proposal on LinkedIn (in Danish)