EU Taxonomy Regulation TAXO-Art.8: Disclosure by financial and non-financial undertakings (Taxonomy Article 8) - the KPI regime

Article 8 imposes the Taxonomy KPI disclosure obligation on undertakings within the scope of the Non-Financial Reporting Directive (NFRD) / Corporate Sustainability Reporting Directive (CSRD). Article 8(1) any undertaking subject to obligation to publish a non-financial / consolidated non-financial statement (under Article 19a or 29a of the Accounting Directive 2013/34/EU) must include in that statement information on how + to what extent the undertaking's activities are associated with environmentally sustainable economic activities. Article 8(2) the KPIs include: (a) the proportion of TURNOVER derived from products or services associated with Taxonomy-aligned activities; (b) the proportion of CAPITAL EXPENDITURE (CapEx); (c) the proportion of OPERATING EXPENDITURE (OpEx). Article 8(3) financial undertakings disclose the proportion of their total assets representing investments / loans related to Taxonomy-aligned activities (the Green Asset Ratio GAR for credit institutions + the insurance underwriting KPI for insurance undertakings) per Commission Delegated Regulation (EU) 2021/2178 (the Disclosures Delegated Act). Article 8(4) the Commission has adopted the Disclosures Delegated Act setting out the content + methodology + presentation of the Article 8 KPI disclosures. From CSRD application (FY2024 first wave + FY2025-FY2028 subsequent waves) the Article 8 KPIs are part of the ESRS reporting + subject to limited assurance.