The new EU taxonomy reporting requirements will prevent businesses from publishing vague or unclear information about ‘greenness’. For example, in recent years, companies have described themselves or their products as ‘green’, without specifying how they are environmentally friendly or what makes them ‘green’. A big corporation could say that their product was green, even if the supply chain or the raw materials they used had negative environmental impacts. 

How EU Taxonomy Reporting Requirements Change Things

So what are the principal changes to the existing legislation that the EU taxonomy reporting requirements will bring? The principal changes proposed aim to:

• Apply the new principles to every single huge organisation, regardless of whether recorded (eliminating the ongoing 500-worker requirement) and to recorded SMEs (widening the scope of reporting requirements). 

• Require companies to provide details regarding the full scope of supportability data pertinent to the organisation’s business, and that revealing should be in accordance with obligatory EU taxonomy reporting requirements’ norms that have been created by the European Commission;

• Expect that the manageability data is dependent upon a restricted degree of review confirmation; and…

• Expect organisations to set up their summaries of financial activity and their board reports in a computerised machine readable format. 

EU Taxonomy Reporting: Why is it Needed?

We hear many listening politicians and business leaders say that we need to reduce the amount of waste, we need to conserve energy with wind and solar power, we need to conserve water, waste oil, and we need to fix our waste water problems. Can technology and human ingenuity really help solve all these problems? The EU taxonomy reporting requirements are hoped to be influential in encouraging other jurisdictions to adopt similar practices. 

Additionally, sustainable business owners and managers are called upon by the board of directors, investors, and to the extent possible “outsiders” to get their money invested in micro and macro green technology. But isn’t green industry innovation mutually exclusive in that we can’t specialise in both areas? Getting financed in any field requires either a stable approach to our business or our ability to get along with entrepreneurs who are doing the same thing we are.

Investment in sustainable financial products is also going to be encouraged by the EU taxonomy reporting requirements.  Let’s say we trust our banker, helping future generations to acquire ownership in the company, or taking the initiative to change up the way we do business. But, as we are required to “partner or work for someone else”, we need to go about reinventing ourselves while at the same time keeping up the same pace with those around us. 

The Implications for Business Today

Lastly, sustainability doesn’t mean a little tweak here or a little tweak there, and innovation involves change – so we must foster change over time and not look for perfection right away. Integration, collaboration, and corporate agility are some of the practices required to grow and sustain green operations, and this means that as a green business owner you must collaborate with others in your industry and form innovative partnerships. Every green business owner and manager will find their roles are more, not less, challenging at first – but the end goal is definitely worth a little short-term hardship. We may need to out-think and out-innovate ourselves to be successful, but our customers see value in our greater efficiency, effectiveness, and truly sustainable business practices – yielding greater profitability as a result..

Thanks to the new EU Taxonomy reporting requirements a sustainable business is no longer an option, it’s a survival mechanism. The sustainability plan is no longer a tactical plan, but a strategic plan. The sustainability plan must now become more than the cost of operation, but rather the goal of sustained viability – and the EU Taxonomy is the framework that will allow us to begin to see viable solutions to our green business problems, and that all-important triple bottom line – business being done in ways that help the economy, and don’t harm the planet or deplete it’s resources.