EU taxonomy

This page describes Upright's EU taxonomy metrics.

This document describes what EU taxonomy metrics Upright provides. Upright's methodology on producing EU taxonomy metrics is detailed here.

The EU taxonomy for sustainable activities

The EU taxonomy for sustainable activities (often called just the EU taxonomy) is a classification system developed by the EU, establishing a list of environmentally sustainable economic activities.

As described by the EU, the goal of the EU taxonomy is to provide companies, investors and policymakers with definitions for which economic activities can be considered environmentally sustainable. In this way, it seeks to:

  • Create security for investors

  • Protect private investors from greenwashing

  • Help companies to become more climate-friendly

  • Mitigate market fragmentation

  • Help shift investments where they are most needed

The EU taxonomy defines environmentally sustainable activities based on the following six objectives:

  1. Climate change mitigation

  2. Climate change adaptation

  3. The sustainable use and protection of water and marine resources

  4. The transition to a circular economy

  5. Pollution prevention and control

  6. The protection and restoration of biodiversity and ecosystems

The European Commission website provides more information on the EU taxonomy, including its motivation, associated legislation and frequently asked questions.

Upright's EU taxonomy metrics

The below content assumes basic familiarity with the EU taxonomy regulation. Most importantly, the reader should be familiar with eligibility, alignment, transitional activities, and enabling activities.

These terms are defined in the FAQ document published by the European Commission.

Company-level metrics

Upright provides the following taxonomy metrics for each company within Upright's coverage:

  • Aggregate (union) taxonomy eligibility and alignment for the 2 climate change objectives

  • Aggregate (union) taxonomy eligibility and alignment for all 6 objectives

  • Taxonomy eligibility and alignment for each of the 6 taxonomy objectives

  • List of activities contributing to each of the 6 taxonomy objectives

All metrics are broken down into contributions from transitional and enabling activities.

Additionally, the metrics include a split between nuclear and natural gas eligibility/alignment, and other eligibility/alignment, as required by the Regulatory Technical Standards (RTS) published by the European Supervisory Authorities in September 2023.

Disclosed and estimated values for EU taxonomy metrics

Upright's EU taxonomy metrics include both company-disclosed values and values estimated by Upright. Upright provides either a disclosed or estimated value for all companies that are within coverage. Currently, the following metrics are always estimated:

  • Metrics for other than climate change objectives: Metrics for objectives beyond the climate change objectives are all estimated, because these metrics are still in draft stage and therefore not included in current company disclosures.

  • Metrics from companies that are not disclosing EU taxonomy metrics: Only large companies based in the EU are required to disclose EU taxonomy metrics.

Portfolio-level metrics

All of the company-level metrics are provided also aggregated to portfolio-level.

All portfolio metrics can be broken down to companies in each portfolio.

Unrecognized assets in portfolio-level EU taxonomy aggregation

The weight of unrecognized assets is included in the denominator in portfolio-level EU taxonomy eligibility and alignment aggregation. In other words, unrecognized assets will be assumed to not qualify as taxonomy eligible or aligned. This interpretation follows the guidance laid out in the European Commission's Q&A dated 25 May 2022. Unrecognized assets may include assets like currencies, government bonds or unrecognized company bonds.

EU taxonomy metrics in the Upright API

In addition to the Upright Platform UI, all metrics listed above are available from the regulatory metrics endpoint in the Upright API.

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