(1)

Article 8(1) of Regulation (EU) 2020/852 requires undertakings that are subject to Articles 19a or 29a of Directive 2013/34/EU of the European Parliament and of the Council (2) to disclose how and to what extent their activities are associated with environmentally sustainable economic activities. Article 8(2) of Regulation (EU) 2020/852 requires non-financial undertakings to disclose information on the proportion of the turnover, capital expenditure and operating expenditure (‘key performance indicators’) of their activities related to assets or processes associated with environmentally sustainable economic activities. That provision, however, does not specify equivalent key performance indicators for financial undertakings, that is credit institutions, asset managers, investment firms and insurance and reinsurance undertakings. It is therefore necessary to supplement Article 8 of Regulation (EU) 2020/852 to specify the key performance indicators for financial undertakings and further specify the content and presentation of the information to be disclosed by all undertakings and the methodology to comply with that disclosure.

(2)

It is necessary to ensure a uniform application of the disclosure requirements laid down in Article 8(2) of Regulation (EU) 2020/852 by non-financial undertakings that are subject to Articles 19a or 29a of Directive 2013/34/EU. Rules should therefore be laid down to further specify the content and presentation of the information required by Article 8 of Regulation (EU) 2020/852, including the methodology to comply with those rules. To enable investors and the public to properly assess the proportion of environmentally sustainable economic activities (‘Taxonomy-aligned activities’) of non-financial undertakings, those undertakings should be required to disclose which of their economic activities are Taxonomy-aligned. In addition, it is necessary to disclose to which environmental objectives those activities contribute substantially. Non-financial undertakings should therefore also provide for a breakdown in the key performance indicators of the proportion of Taxonomy-aligned activities based on each environmental objective to which those activities contribute substantially.

(3)

Turnover, capital expenditure and operating expenditure are irrelevant for assessing the environmental sustainability of financial activities, including lending, investment and insurance. The three key performance indicators for non-financial undertakings laid down in Article 8(2) of Regulation (EU) 2020/852 are therefore not appropriate to demonstrate to what extent the economic activities of financial undertakings are -Taxonomy-aligned. It is therefore necessary to provide specific key performance indicators and calculation methodologies for such key performance indicators for financial undertakings. To support markets’ understanding of those key performance indicators, any disclosures of those key performance indicators should be accompanied by qualitative information to enable financial undertakings to explain their determination of key performance indicators.

(4)

Investors and the public should be able to assess the proportion of Taxonomy-aligned economic activities pursued by investee undertakings. Asset managers should therefore disclose the proportion of investments they made in Taxonomy-aligned economic activities in the value of all investments managed by them resulting from both their collective and individual portfolio management activities. That proportion of Taxonomy-aligned investments should be calculated asthe proportion of Taxonomy-aligned economic activities of investee undertakings which results from their respective key performance indicators, because those key performance indicators reflect the environmental performance of investee undertakings.

(5)

The main activity of credit institutions is the provision of financing to and investments in the real economy. The exposures of credit institutions to undertakings that they finance or invest in are reflected as assets in the credit institutions’ balance sheet. The main key performance indicator for credit institutions that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should be the green asset ratio (GAR), which shows the proportion of exposures related to Taxonomy-aligned activities compared to the total assets of those credit institutions. The GAR should relate to the credit institutions’ main lending and investment business, including loans, advances and debt securities, and to their equity holdings to reflect the extent to which those institutions finance Taxonomy-aligned activities.

(6)

Credit institutions also perform other commercial services and activities than the provision of financing. Those activities generate fees and commission income. It is necessary to enable investors and the public to assess the proportion of Taxonomy-aligned economic activities pursued by the recipients of those services. Credit institutions that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should therefore also disclose what proportion of their fees and commission income is derived from commercial services and activities that are associated with Taxonomy-aligned economic activities of their clients.

(7)

Credit institutions may manage underlying assets or provide financial guarantees, leading to off-balance-sheet exposures. To enable investors and the public to assess the proportion of Taxonomy-aligned activities pursued by credit institutions, for those off-balance-sheet exposures, credit institutions that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should disclose the proportion of Taxonomy-aligned activities in the underlying assets that they manage or in the obligations the performance of which they guarantee.

(8)

In addition to disclosures concerning their banking book, credit institutions that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should also disclose separately the overall composition of their total assets, including their trading book, and any trends and limits in terms of climate and environmental risks. Credit institutions with a significant trading activity should be subject to obligations for more granulardisclosures for their trading book.

(9)

It is important to provide investors and the public with a complete overview of which investments an investment firm that is subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU has made in Taxonomy-aligned activities. The key performance indicators for such investment firms should therefore cover both their dealing on own account and their dealing on behalf of clients. The disclosure of the key performance indicator for dealing on own account should reflect which proportion of the total assets is composed of assets related to Taxonomy-aligned activities. That indicator should focus on the investment firms’ investments, includingdebt securities and equity instruments in investee companies. The key performance indicator for the environmental sustainability of investment firms’ services and activities on behalf of all their clients should be based on the revenue in the form of fees, commissions and other monetary benefits that investment firms generate from their investment services and activities carried out for their clients.

(10)

The key performance indicators for insurance and reinsurance undertakings that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should capture their non-life underwriting activities and investment policy that are part of their business model to show the extent to which those activities are aligned with the Taxonomy. One key performance indicator should relate to the investment policy of such insurance and reinsurance undertakings for the funds collected from their underwriting activities and should show the proportion of assets invested in Taxonomy-aligned activities in their overall assets. A second indicator should relate to the underwriting activities themselves and show what proportion of the overall non-life underwriting activities is composed of non-life underwriting activities that relate to climate adaptation and which are performed in accordance with Commission Delegated Regulation (EU) 2021/2139 (3) (‘Climate Delegated Act’).

(11)

Financial undertakings that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should not take into account the exposure to, or investments in, non-financial undertakings that are not subject to Articles 19a and 29a of Directive 2013/34/EU in the calculation of the numerator of key performance indicators. An inclusion of such exposures in the numerator may be considered at the time of review of this Delegated Act which will be accompanied by an impact assessment. Those non-financial undertakings may still decide to voluntarily disclose their key performance indicators, either to have access to environmentally sustainable finance as part of specific eco-labelling schemes and environmentally sustainable financial products, or as part of their overall business strategy based on environmental sustainability.

(12)

In view of the entry into force and application of Climate Delegated Act by the end of 2021 and material difficulties for assessing compliance of economic activities in 2022 with technical screening criteria laid down in that Delegated Regulation for the previous reporting year, the application of this Regulation in 2022 should be limited to certain elements and qualitative reporting, with the remaining provisions starting to apply from 1 January 2023 for non-financial undertakings and from 1 January 2024 for financial undertakings. Moreover, the key performance indicators of credit institutions related to their trading book and commission and fees for other commercial services and activities than the provision of financing should apply from 1 January 2026.

(13)

Due to the current lack of an appropriate calculation methodology, exposures to central governments, central banks and supranational issuers should be excluded from the calculation of the numerator and denominator of key performance indicators. Financial undertakings may, on a voluntary basis, provide information in relation to exposures to taxonomy aligned bonds and taxonomy aligned debt securities that are issued by central governments, central banks or supranational issuers. There should be a review by 30 June 2024 that should evaluate the possibility of inclusion of such exposures in the key performance indicators,

(1)

‘environmental objective’ means one of the environmental objectives laid down in Article 9 of Regulation (EU) 2020/852;

(2)

‘Taxonomy-aligned economic activity’ means an economic activity that complies with the requirements laid down in Article 3 of Regulation (EU) 2020/852;

(3)

‘transitional economic activity’ means an economic activity that complies with the requirements laid down in Article 10(2) of Regulation (EU) 2020/852;

(4)

‘enabling economic activity’ means an economic activity that complies with the requirements laid down in Article 16 of Regulation (EU) 2020/852;

(5)

‘taxonomy-eligible economic activity’ means an economic activity that is described in the delegated acts adopted pursuant to Article 10(3), Article 11(3), Article 12(2), Article 13(2), Article 14(2), and Article 15(2), of Regulation (EU) 2020/852, irrespective of whether that economic activity meets any or all of the technical screening criteria laid down in those delegated acts;

(6)

‘taxonomy-non-eligible economic activity’ means any economic activity that is not described in the delegated acts adopted pursuant to Article 10(3), Article 11(3), Article 12(2), Article 13(2), Article 14(2) and Article 15(2), of Regulation (EU) 2020/852;

(7)

‘asset manager’ meansan undertaking that is subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU and is either of the following:

(8)

‘financial undertaking’ means an undertaking that is subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU and is an asset manager, a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council (6), an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013, an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council (7), or a reinsurance undertaking as defined in Article 13, point (4) of Directive 2009/138/EC;

(9)

‘non-financial undertaking’ means an undertaking that is subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU and is not a financial undertaking as defined in point (8);

(10)

‘taxonomy-aligned insurance or reinsurance activity’ means an insurance or reinsurance activity that complies with the criteria laid down in Sections 10.1 and 10.2 of Annex II to Delegated Regulation (EU) 2021/2139.