Glossary

Spending on acquiring or upgrading fixed assets. In taxonomy reporting, companies disclose the percentage of CAPEX associated with taxonomy-aligned activities.

A systematic process to identify physical climate risks, assess vulnerability and exposure, and plan adaptation solutions. Required under Delegated Regulation (EU) 2021/2139, Appendix A.

EU directive (2022/2464) requiring large companies and listed SMEs to report on sustainability matters, including taxonomy alignment.

Numerical simulation of fluid flow (air, water) used for wind analysis, thermal comfort mapping, and microclimate modeling around buildings.

Secondary legislation adopted by the European Commission that specifies the technical screening criteria for each environmental objective. Key ones: Climate DA (2021/2139), Environmental DA (2023/2486).

One of the four alignment conditions. An activity must not significantly harm any of the other five environmental objectives it does not substantially contribute to.

An activity is taxonomy-eligible if it is described in the Delegated Acts, regardless of whether it meets the technical screening criteria. Eligibility ≠ alignment.

An activity that enables other activities to make a substantial contribution to an environmental objective, without leading to lock-in of unsustainable assets.

A rating of building energy efficiency (A to G). Activity 7.7 requires buildings built before 2021 to have at least EPC class A or be in the top 15% of national stock.

The share of a credit institution's assets that finance taxonomy-aligned activities. Banks must disclose their GAR under taxonomy reporting obligations.

Social minimum standards based on OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights, and ILO core conventions.

EU statistical classification of economic activities used as indicative guidance to identify which business activities fall under taxonomy-covered sectors.

Solutions inspired by nature that provide environmental, social, and economic benefits. The taxonomy favours NBS for climate adaptation, including green/blue infrastructure.

A building with very high energy performance where the nearly zero or very low energy required is covered to a significant extent by renewable sources. Activity 7.1 requires 10% below NZEB threshold.

The 2025 simplification package that streamlined taxonomy reporting requirements, reduced data points, and simplified DNSH assessments for certain activities.

Day-to-day spending on running operations. One of three KPIs (with turnover and CAPEX) that companies report for taxonomy alignment.

The total energy required by a building, including losses in generation and distribution. Key metric for building activities 7.1 and 7.7.

A thermal comfort index measuring the temperature at which a person in a standardized indoor setting would have the same energy balance as in the actual outdoor conditions.

Climate projection scenarios used in CRVAs. The taxonomy references RCP 2.6 (optimistic), 4.5 (moderate), and 8.5 (high-emission) scenarios for 10–30 year projections.

EU regulation requiring financial market participants to disclose how they integrate sustainability risks, including taxonomy alignment of financial products.

One of the four alignment conditions. An activity must make a significant positive contribution to at least one of the six environmental objectives, as defined by the TSC.

An activity that contributes to climate change mitigation where no technologically or economically feasible low-carbon alternative exists, and GHG levels correspond to the best performance in the sector.

Specific quantitative and qualitative thresholds that define when an activity substantially contributes to an objective and when it does no significant harm. Set in Delegated Acts.

Revenue from goods sold and services provided. One of three KPIs that companies report for taxonomy alignment alongside CAPEX and OPEX.

The phenomenon where urban areas are significantly warmer (2–8°C) than surrounding rural areas due to dark surfaces, reduced vegetation, building geometry, and waste heat.

A thermal comfort index based on a multi-node human thermophysiology model. Considers air temperature, wind, radiation, and humidity to assess outdoor thermal stress.