BUSINESS SITUATION
The client was looking to launch an EU taxonomy-aligned product for financial and non-financial reporting entities. The client wanted to assist their key clientele in determining the economic activities that were taxonomy eligible and aligned.
The client required assessment of eligible, aligned, and ineligible activities of a company’s investment, revenue, and expenditure. The objective of the research was to identify whether a company’s activities were financially sustainable and in line with the EU taxonomy regulations.
SGA APPROACH
- Understood the client’s overall strategy, key objectives, and end goals behind the development of the client’s EU Taxonomy product.
- Collaborated with the client in interpreting the requirements of the EU Taxonomy.
- In-depth review of the reports of the TEG (Technical Expert Group), set up by the European Commission in line with the Commission’s legislative proposals that guide the EU Taxonomy.
- Researched sector-wise activities that are eligible and ineligible for financial and non-financial sectors.
- Identified applicable KPIs to research for financial and non-financial sectors.
- Assessed the alignment of eligible taxonomy activities in line with EU regulation and Article 8 annexures.
- Evaluated sector-wise numerators and denominators for relevant KPIs.
- Collaborated with the client to develop data templates, formulate SOPs, and create KPI data collection guidelines for each sector.
- Assessed companies and aggregated quality data efficiently, thereby building coverage for a large universe to meet the client’s required timelines.
ENGAGEMENT
- Creation of data collection templates, guidelines, and SOPs along with comprehensive research and analysis to check for alignment of economic activities and company disclosed information with EU Taxonomy regulatory requirements.
BENEFITS & OUTCOME
- Designed data collection templates, formulated detailed SOPs, and comprehensive data collection guidelines along with individual KPI guidance documents.
- Conducted in-depth research into the company’s activities and categorized activities as eligible and aligned with EU taxonomy regulations.
- Highlighted aggregate and activity level eligible/ineligible taxonomy transactions.
- Identified key climate change adaptation and mitigation activities of the companies researched.
- Refined and enhanced data collection process and guidelines for future deliverables as per findings of the initial research.
OUR CAPABILITIES IN THE EU TAXONOMY SPACE
- Classify eligible activities for sectors identified in the Climate Delegated Act such as construction & real estate, transportation, energy, BFSI, manufacturing, etc.
- Categorize company activities as ‘Transitional’ or ‘Enabling’ as per EU Taxonomy guidelines.
- Assess DNSH/MSS criteria based on technical screening criteria as stated in the EU compass.
- Historical data collection and benchmarking.
- Verify if EU Taxonomy data reported is verified/assured by a third-party agency.
