Who Must Report?
The EU Taxonomy applies to companies and financial institutions in scope of the Corporate Sustainability Reporting Directive. Here is who must report, what they must disclose, and when.
CSRD Size Thresholds
Large EU companies must meet at least two of three criteria to fall within CSRD scope and, consequently, the Taxonomy reporting obligation.
Employees
Average number during the financial year
Net Turnover
Annual net turnover
Total Assets
Balance sheet total
Under the Omnibus Simplification proposal (February 2025), taxonomy reporting would become voluntary for companies with fewer than 1,000 employees. The size thresholds above remain relevant for determining CSRD scope, but the taxonomy reporting obligation would narrow significantly if the proposal is adopted.
The Three Mandatory KPIs
Non-financial companies must report these three key performance indicators, each broken down by environmental objective, for both taxonomy-eligible and taxonomy-aligned activities.
Turnover
The proportion of net revenue derived from products or services associated with taxonomy-aligned economic activities. This KPI answers: how much of your business is green?
CAPEX
The proportion of capital expenditure related to assets or processes associated with taxonomy-aligned activities, or part of a plan to expand or achieve alignment. Captures investment in the green transition.
OPEX
The proportion of operational expenditure (non-capitalised R&D, renovation, short-term leases, maintenance) related to taxonomy-aligned activities. A narrower definition than typical accounting OPEX.
Reporting by Entity Type
Different categories of entities face different disclosure obligations under the Taxonomy.
Large Non-Financial Companies
CSRD in-scopeCompanies meeting at least two of three size criteria must disclose three KPIs (turnover, CAPEX, OPEX) broken down by environmental objective. This includes both eligibility and alignment figures.
- Disclose per-objective eligibility and alignment
- Report all three KPIs in standardised templates
- Separate "enabling" and "transitional" activity contributions
- Voluntary for companies with < 1,000 employees under Omnibus
Banks & Credit Institutions
CRR-regulatedCredit institutions must calculate and disclose the Green Asset Ratio (GAR) - the share of their banking book assets financing taxonomy-aligned activities. This relies on counterparty disclosures from non-financial companies.
- Green Asset Ratio (GAR) based on banking book exposures
- Breakdown by objective and sector
- Separate treatment for sovereigns, central banks, and trading book
- Transitional KPIs for new lending (flow-based ratios)
Insurance & Reinsurance
Solvency IIInsurers report two ratios: the taxonomy alignment of their investment portfolio (similar to GAR) and the alignment of their underwriting activities for non-life insurance products covering climate-related perils.
- Investment portfolio alignment ratio
- Underwriting KPI for non-life climate-related products
- Alignment of premium income from adaptation-relevant policies
Asset Managers & Fund Companies
SFDR in-scopeAsset managers disclose taxonomy alignment at the entity and product level. SFDR Article 8 and Article 9 funds must state the minimum proportion of taxonomy-aligned investments and report actual alignment.
- Entity-level weighted average taxonomy alignment
- Product-level alignment for Article 8 / Article 9 funds
- Pre-contractual and periodic disclosure under SFDR
- Green Investment Ratio (GIR) for investment firms
CSRD Phase-In Schedule
The Corporate Sustainability Reporting Directive is phased in over multiple waves, progressively extending taxonomy reporting obligations to more companies.
Large public-interest entities with 500+ employees (previously under NFRD)
All large companies meeting at least 2 of 3 size criteria (250 employees, EUR 50M turnover, EUR 25M assets)
Listed SMEs, small non-complex credit institutions, and captive insurance undertakings
Voluntary for companies with fewer than 1,000 employees. Full obligations remain for large companies above this threshold.
Eligibility vs. Alignment
It is important to distinguish between taxonomy eligibility and taxonomy alignment. An activity is eligible if it is described in the Delegated Acts, regardless of whether it meets the performance criteria. An activity is aligned only if it satisfies all four conditions: substantial contribution, DNSH, minimum safeguards, and technical screening criteria.
Companies must report both figures. The eligibility ratio shows the scope of activities covered by the Taxonomy, while the alignment ratio shows what proportion actually meets the sustainability benchmarks. The difference between the two numbers is particularly informative for investors, as it highlights the gap between a company's potential and its current environmental performance.
Explore the Full Framework
Understand the regulation, environmental objectives, and technical criteria that define the EU Taxonomy.