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EU Taxonomy Regulation Financial KPIs and Green Asset Ratio (GAR) FAQ

Article 8 does not use the same KPI model for banks, asset managers, investment firms, insurers, and non-financial undertakings. Financial undertakings need the category-specific KPIs in the Disclosures Delegated Act.

Use this FAQ to separate the credit institution GAR from other financial undertaking KPIs and to check timing, numerator exclusions, and required qualitative disclosures.

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Author
Sorena AI
Published
May 9, 2026
Updated
May 9, 2026
Questions
4

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Primary sources
4

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Sorena AI
Published May 9, 2026
Updated May 9, 2026
Overview

This FAQ explains how financial undertaking KPIs work under EU Taxonomy Article 8 and Commission Delegated Regulation (EU) 2021/2178. It focuses on the Green Asset Ratio (GAR), why the non-financial turnover, CapEx, and OpEx KPIs do not transfer directly to financial activities, and what disclosures need to accompany the numbers.

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4 of 4 questions
Question 1

Which financial KPIs apply under EU Taxonomy Article 8?

Article 8 of Regulation (EU) 2020/852 requires undertakings that must publish non-financial information under Articles 19a or 29a of Directive 2013/34/EU to disclose how and to what extent their activities are associated with environmentally sustainable economic activities. Article 8 names turnover, CapEx, and OpEx for non-financial undertakings, then requires a delegated act to specify the content, presentation, and methodology, including the specificities of financial undertakings.

The Disclosures Delegated Act explains why the non-financial turnover, capital expenditure, and operating expenditure KPIs are not appropriate for lending, investment, and insurance activities. It therefore sets separate KPI frameworks for asset managers, credit institutions, investment firms, and insurance and reinsurance undertakings.

  • Start by classifying the reporting entity: asset manager, credit institution, investment firm, insurance or reinsurance undertaking, or non-financial undertaking.
  • Use Annexes III and XI for asset managers, Annexes V and XI for credit institutions, Annexes VII and XI for investment firms, and Annexes IX and XI for insurance and reinsurance undertakings.
  • Do not describe GAR as the universal Taxonomy KPI for every entity; in the delegated act, GAR is the main credit institution KPI and related GAR-style ratios are adapted for other financial undertaking activities.
Citations
Question 2

What does the Green Asset Ratio measure for credit institutions?

For credit institutions subject to Articles 19a and 29a of Directive 2013/34/EU, the Disclosures Delegated Act identifies the Green Asset Ratio as the main KPI. It is intended to show the proportion of exposures related to Taxonomy-aligned activities compared with the credit institution's total assets.

The delegated act links the GAR to the institution's main lending and investment business, including loans, advances, debt securities, and equity holdings. For credit exposures to financial undertakings, the numerator is based on counterparties' KPIs calculated under the same delegated regulation; for credit institutions as counterparties, that means using the counterparty's total GAR.

  • Separate credit institution GAR from non-financial undertaking turnover, CapEx, and OpEx KPIs.
  • Keep the denominator and numerator logic traceable to the relevant GAR template and exposure type.
  • For use-of-proceeds instruments, keep issuer or counterparty information showing which Taxonomy-aligned economic activity or project is financed.
  • Avoid double counting where the same specialised lending exposure or bond could relate to more than one environmental objective.
Citations
Question 3

Which timing rules and exclusions matter most for GAR and financial KPIs?

The Disclosures Delegated Act phased in reporting. Non-financial undertaking KPIs applied from 1 January 2023, while financial undertaking KPIs applied from 1 January 2024. Credit institution KPIs for the trading book and for commission and fee income for commercial services and activities other than financing apply from 1 January 2026.

Some exposures are excluded from the financial undertaking KPI numerator or from both numerator and denominator. Central governments, central banks, and supranational issuers are excluded from both the numerator and denominator. Derivatives are excluded from the numerator. Exposures to undertakings not obliged to publish non-financial information under Articles 19a or 29a of Directive 2013/34/EU are excluded from the numerator.

  • Check the reporting year before comparing GAR data across institutions or periods.
  • Do not mix the 2022-2023 transitional financial undertaking disclosures with the full financial undertaking KPI regime from 2024.
  • Track excluded exposure classes separately so users can understand what is outside the KPI.
  • When an exposure is not financing a specific identified activity, use the issuer or counterparty KPI weighting approach required by the delegated act rather than treating the whole exposure as aligned.
Citations
Question 4

What evidence should accompany financial undertaking KPI disclosures?

The financial undertaking KPI number is not enough on its own. Annex XI requires qualitative disclosures to support the quantitative KPIs and market understanding of them.

Useful evidence should therefore explain what assets and activities the KPI covers, which data sources were used, what limitations exist, how Taxonomy-aligned economic activities evolved over time from the second year of implementation, and how the undertaking treats Taxonomy compliance in business strategy, product design, and engagement with clients and counterparties.

  • Keep a mapping from each KPI line item to the relevant annex, template, exposure type, data source, and limitation.
  • Record the rationale for excluding central government, central bank, supranational, derivative, and non-reporting counterparty exposures where relevant.
  • For credit institutions, retain qualitative support for trading portfolio alignment where quantitative trading exposure information is not required.
  • For public explanations, state whether a figure is turnover-based, CapEx-based, exposure-based, revenue-based, investment-based, or underwriting-related.
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Primary sources

References and citations

Commission Notice 2022/C 385/01 on Article 8 Disclosures
eur-lex.europa.eu
Referenced sections
  • Clarifies implementation of the Disclosures Delegated Act, including that eligible activities are not the same thing as KPI denominators.
"eligible activities do not equal to the denominator of the taxonomy alignment KPI"
Regulation (EU) 2020/852 (Taxonomy Regulation)
eur-lex.europa.eu
Referenced sections
  • Grounds the Article 8 disclosure obligation and the delegated-act mandate for financial and non-financial undertaking methodologies.
"information on how and to what extent the undertaking's activities are associated"
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