On 1 March, the European Securities and Markets Authority (ESMA), published its Final Report on advice under Article 8 of the Taxonomy Regulation. Article 8 covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD).
The recommendations outline the Key Performance Indicators (KPIs) disclosing how, and to what extent, the activities of businesses that fall within the scope of the NFRD qualify as environmentally sustainable under the Taxonomy Regulation. The key recommendations relate to the definitions to be used by non-financial undertakings for the calculation of the turnover KPI, the CapEx KPI and the OpEx KPI, and the KPI that asset managers should disclose.
ESMA’s proposals mainly focus on how to further specify the three KPIs included in Article 8(2) of the Taxonomy Regulation for non-financial undertakings and those provided by asset management companies that fall within scope of the NFRD:
- Non-financial undertakings – the proposals set out the definitions that should be used for the calculation of the turnover KPI, the CapEx KPI and the OpEx KPI, supplemented with the minimum information that should accompany these disclosures; and
- Asset managers – the proposals set out the KPI that asset managers should disclose, the methodology to be applied to that KPI and recommendations for the development of a coefficient methodology to assess Taxonomy-alignment of investments in investee companies that do not report under the NFRD.
For more information please contact Ioannis Sidiropoulos or your usual contact in Elias Neocleous & Co LLC.