Taxonomy Delegated Acts – amendments to make reporting simpler and more cost-effective for companies

FEAD welcomes the EU’s objectives to reduce administrative burden, especially for SMEs, boost competitiveness, and unlock additional investment capacity. At the same time, we note the positive impact that sustainability reporting also has in boosting EU objectives, notably the circular economy, by incentivising the uptake of recycled materials, which in its turn is also contributing to the EU’s competitiveness as well reflected in the Clean Industrial Deal.

With regards to the proposed draft amendments to the Taxonomy Delegated Acts, we raise the following comments:

• Template revision: simplifying reporting templates is beneficial, focussing on condensing information of limited added value — such as certain DNSH analysis columns or minimum safeguards. At the same time, key data must be reported transparently. Elements, such as the list of business activities linked to Taxonomy objectives, assessments of non-alignment, and the valuation of eligible and non- eligible activities, should remain intact.

• The composition of Taxonomy OpEx should be aligned with common accounting practice. In terms of OpEx data, the value of the corresponding information appears to be very limited to users of EU Taxonomy reports. From our perspective, this is due to the very specific definition of EU Taxonomy OpEx which is not well understood in business or on capital markets. Therefore, we would recommend to either totally remove the OpEx-KPI from the EU Taxonomy or (as suggested by the Platform on Sustainable Finance) to redefine the OpEx-KPI to exclusively include research and development costs, which are easier to identify within the existing accounting systems.

• The proposed materiality tests with thresholds of 10% or 25% respectively, brings a lot of questions regarding its interpretation. We encourage the EU Commission to develop numeric examples addressing different settings to illustrate the application of the materiality tests to be performed by companies. As a result, the wording of the materiality requirements should be further developed to make it clearer to reporting entities how the test should be performed and what the consequences on the level of the reported numbers for the economic activities are.

FEAD is the European Waste Management Association, representing the private waste and resource management industry across Europe, including 20 national waste management federations and 3,000 waste management companies. Private waste management companies operate in 60% of municipal waste markets in Europe and in 75% of industrial and commercial waste. This means more than 320,000 local jobs, fuelling €5 billion of investments into the economy every year.

For more information: contact us at info@fead.be