The EU Taxonomy is the European Union’s classification system that defines which economic activities can be considered environmentally sustainable. It is a key tool of the European Green Deal and sustainable finance, designed to guide investments toward sustainable activities, prevent greenwashing, and improve transparency in ESG disclosures.
Compliance with the EU Taxonomy is mandatory for all companies subject to reporting obligations under the CSRD (Corporate Sustainability Reporting Directive), and indirectly also affects SMEs that are part of complex supply chains or seek access to ESG financing.
For SMEs, it represents an opportunity to enhance their reputation, attract investors, and strengthen long-term resilience.
Circularity supports companies through a clear and structured path to understand, measure, and communicate their level of alignment with the EU Taxonomy. The service is modular and adaptable to the sector-specific and organizational characteristics of each business, and is divided into four main phases:
Mapping of company activities according to the NACE classification and identification of activities potentially eligible under the EU Taxonomy.
Analysis of eligible activities to verify compliance with the three key criteria: substantial contribution to one of the six environmental objectives, do no significant harm (DNSH) to the others, and respect for minimum social safeguards (OECD, UN, ILO standards).
Measurement of the share of revenue, capital expenditures (CapEx), and operating expenses (OpEx) associated with aligned activities, along with the preparation of the required quantitative and qualitative reporting.
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Drafting of dedicated sections for the sustainability report or management report, and creation of summary graphic materials to communicate results to all stakeholders.
- Regulatory compliance with CSRD, SFDR, and other EU directives
- Easier access to capital: financial institutions assess the share of taxonomy-aligned activities
- ESG credibility: enhanced reputation and reduced risk of greenwashing
- Strategic transition tool: identification of improvement areas to strengthen corporate sustainability
- Tailored approach: services adapted to the company’s operational and sector-specific context
The 6 Objectives of the EU Taxonomy
The six environmental objectives defined by the EU Taxonomy (Regulation EU 2020/852) are the pillars on which the classification of sustainable economic activities is based. An activity can be considered aligned with the Taxonomy only if it makes a substantial contribution to at least one of these objectives, without causing significant harm to the other five (DNSH principle – Do No Significant Harm).
Includes all activities that contribute to reducing or avoiding greenhouse gas emissions. Examples include renewable energy, energy efficiency, electric mobility, and low-emission buildings.
Covers activities that reduce physical climate-related risks—such as floods, droughts, and heatwaves—by enhancing the resilience of people, infrastructure, and natural systems.
Relates to activities that improve water efficiency, reduce water pollution, and promote the protection of marine and aquatic ecosystems.
Includes activities that promote waste reduction, reuse, repair, recycling, and efficient use of resources. It also encompasses circular business models and solutions that enhance product durability.
Refers to activities that limit or eliminate air, soil, and water pollution through clean technologies, filtration systems, and low-impact industrial processes.
Includes activities that preserve nature, restore degraded habitats, protect species, and enhance the sustainable management of land and forests.
Get Ready for the Future of European Sustainability — Align Your Investments with the EU Taxonomy
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