--- title: "EU Taxonomy FAQ: eligibility, alignment, DNSH, safeguards, and Article 8" canonical_url: "https://www.sorena.io/artifacts/eu/taxonomy-regulation/faq" source_url: "https://www.sorena.io/artifacts/eu/taxonomy-regulation/faq/items/page/2" author: "Sorena AI" description: "EU Taxonomy FAQ hub for eligibility, alignment, technical screening criteria, DNSH, minimum safeguards, Article 8 KPIs, delegated acts, and evidence records." published_at: "2026-05-09" updated_at: "2026-05-27" keywords: - "EU Taxonomy FAQ" - "Regulation (EU) 2020/852" - "EU Taxonomy eligibility" - "EU Taxonomy alignment" - "technical screening criteria" - "DNSH" - "minimum safeguards" - "Article 8 KPIs" - "turnover CapEx OpEx" - "Green Asset Ratio" - "EU Taxonomy" - "Taxonomy eligibility" - "Taxonomy alignment" --- **[SORENA](https://www.sorena.io/)** - AI-Powered GRC Platform [Home](https://www.sorena.io/) | [Solutions](https://www.sorena.io/solutions) | [Artifacts](https://www.sorena.io/artifacts) | [About Us](https://www.sorena.io/about-us) | [Contact](https://www.sorena.io/contact) | [Portal](https://app.sorena.io) --- # EU Taxonomy FAQ: eligibility, alignment, DNSH, safeguards, and Article 8 EU Taxonomy FAQ hub for eligibility, alignment, technical screening criteria, DNSH, minimum safeguards, Article 8 KPIs, delegated acts, and evidence records. *FAQ Hub* *Taxonomy* *EU* ## EU Taxonomy FAQ eligibility, alignment, DNSH, safeguards, and Article 8 reporting Direct answers for teams deciding whether an economic activity is Taxonomy-eligible, what is needed for alignment, and what evidence supports Article 8 disclosures. Use the linked FAQ modules to separate delegated-act activity mapping, technical screening criteria, do-no-significant-harm checks, Article 18 minimum safeguards, and KPI reporting. The EU Taxonomy is the EU classification system for environmentally sustainable economic activities. This FAQ hub is for legal, finance, sustainability, product, and portfolio teams that need a practical path from an activity description to eligibility, alignment, evidence, and Article 8 disclosure decisions without treating the Taxonomy as a generic ESG label. ## Browse sub-FAQ modules ### [DNSH Appendix C under the EU Taxonomy: chemicals evidence FAQ](/artifacts/eu/taxonomy-regulation/faq/dnsh-appendix-c.md) Practical FAQ on EU Taxonomy DNSH Appendix C chemicals criteria, including SVHCs, CLP hazard classes, the 0.1% w/w threshold, suitable alternatives, and controlled conditions evidence. - 3 items ### [EU Taxonomy 2026 simplification: what should teams do?](/artifacts/eu/taxonomy-regulation/faq/2026-simplification.md) source-linked FAQ on EU Taxonomy 2026 simplification, Regulation (EU) 2026/73, Article 8 reporting, DNSH evidence, and limits on unsupported claims. - 4 items ### [EU Taxonomy activity evidence packs: what to retain](/artifacts/eu/taxonomy-regulation/faq/activity-evidence-packs.md) A practical FAQ on EU Taxonomy activity evidence packs: eligibility, alignment, DNSH, minimum safeguards, KPI traceability, and source-linked review records. - 4 items ### [EU Taxonomy Article 8 Scope FAQ](/artifacts/eu/taxonomy-regulation/faq/article-8-scope.md) source-linked FAQ on EU Taxonomy Article 8 scope, including who reports, which KPI framework applies, and what evidence teams should retain. - 4 items ### [EU Taxonomy auditor evidence: what to keep for alignment review](/artifacts/eu/taxonomy-regulation/faq/auditor-evidence.md) Practical FAQ on EU Taxonomy auditor evidence: what evidence supports eligibility, alignment, DNSH, minimum safeguards, and Article 8 KPI disclosures. - 4 items ### [EU Taxonomy CapEx Plans FAQ: Article 8 CapEx KPI](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md) Practical FAQ on EU Taxonomy CapEx plans under Article 8, Annex I Section 1.1.2.2, management-body approval, timing, activity-level evidence, and KPI restatement. - 5 items ### [EU Taxonomy delegated act changes: what teams should check](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md) FAQ on handling EU Taxonomy delegated act changes: official source checks, application dates, affected criteria, disclosures, DNSH evidence, and review records. - 4 items ### [EU Taxonomy eligibility vs alignment: what is the difference?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md) Eligibility means an activity is covered by Taxonomy delegated acts; alignment means it also meets Article 3 conditions, technical screening criteria, DNSH, and minimum safeguards. - 4 items ### [EU Taxonomy Financial KPIs and Green Asset Ratio (GAR) FAQ](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md) FAQ on EU Taxonomy Article 8 financial undertaking KPIs, credit institution Green Asset Ratio (GAR), reporting dates, exclusions, and qualitative disclosures. - 4 items ### [EU Taxonomy minimum safeguards FAQ: Article 18 evidence](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md) FAQ on EU Taxonomy minimum safeguards under Article 18: who must comply, which OECD, UNGP, ILO and human-rights evidence to keep, and common reporting mistakes. - 5 items ### [EU Taxonomy non-financial KPIs: turnover, CapEx and OpEx](/artifacts/eu/taxonomy-regulation/faq/non-financial-kpis.md) Article 8 FAQ for non-financial undertakings reporting EU Taxonomy turnover, CapEx and OpEx KPIs, with evidence and source checks. - 4 items ### [EU Taxonomy Six Environmental Objectives | Article 9 FAQ](/artifacts/eu/taxonomy-regulation/faq/six-environmental-objectives.md) Plain-English FAQ on the six EU Taxonomy environmental objectives in Article 9 and how teams should map activities, DNSH checks, safeguards, and evidence. - 4 items Browse all indexed questions: [/artifacts/eu/taxonomy-regulation/faq/items](/artifacts/eu/taxonomy-regulation/faq/items.md) ## All FAQ items *Page 2 of 3. Showing 20 of 49 items.* ### [What must a qualifying CapEx plan show?](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md#what-must-a-qualifying-capex-plan-show) *Module: [EU Taxonomy CapEx Plans FAQ: Article 8 CapEx KPI](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md)* The plan must aim either to expand Taxonomy-aligned economic activities or to upgrade Taxonomy-eligible economic activities so they become Taxonomy-aligned within five years. A longer period is allowed only where objectively justified by specific features of the activity and upgrade, with a maximum of 10 years. - Economic activity, environmental objective, and applicable delegated-act activity description. - Management-body or delegated approval record and approval date. - Planned measures needed to meet the relevant technical screening criteria. - Expenditure related to those measures and their timing, including significant interim milestones. - Objective justification in the plan and contextual information if the expected alignment period exceeds five years. Sources for this answer: - [Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - Annex I Section 1.1.2.2 sets the CapEx plan purpose, five-year condition, management-body approval requirement, and maximum 10-year justified period. - [Commission Notice C/2023/305 on Article 8 disclosures](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - FAQ 24 says the plan period starts from approval; FAQ 26 describes the expected detail for measures, expenditure, timing, and milestones. ### [What evidence should sit behind the CapEx KPI?](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md#what-evidence-should-sit-behind-the-capex-kpi) *Module: [EU Taxonomy CapEx Plans FAQ: Article 8 CapEx KPI](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md)* The evidence should connect the legal route to the accounting amount. Annex I defines the CapEx denominator by reference to additions to tangible and intangible assets during the financial year, and the undertaking should explain how CapEx was determined, allocated to the numerator, and linked to related line items. - CapEx denominator workbook and related financial-statement line-item references. - Activity-level allocation showing which amounts fall under Section 1.1.2.2 points (a), (b), or (c). - CapEx plan record with objectives, activities, planned measures, timing, expected expenditure, and approval evidence. - Technical screening criteria evidence for the activity expected to become Taxonomy-aligned. - Double-counting control across activities, objectives, turnover, CapEx, and OpEx. - Published contextual explanation for methodology, allocation, material changes, and restatements. Sources for this answer: - [Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - Annex I defines the CapEx KPI denominator, numerator, calculation explanations, double-counting explanation, and contextual information. - [Commission Notice C/2023/305 on Article 8 disclosures](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - FAQ 27 explains activity-level presentation of CapEx items under Section 1.1.2.2 points (a), (b), and (c). - [Commission Notice on Article 8 eligible activities and assets](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022XC1006%2801%29&ref=sorena.io) - Commission notice explains CapEx and OpEx categories for Taxonomy eligibility reporting and the need to avoid double reporting. ### [What changes require update or restatement?](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md#what-changes-require-update-or-restatement) *Module: [EU Taxonomy CapEx Plans FAQ: Article 8 CapEx KPI](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md)* If relevant technical screening criteria are amended before completion of the CapEx plan, Annex I requires the undertaking either to update the plan within two years so the activities are aligned with the amended criteria at completion, or to restate the CapEx KPI numerator. Updating the plan restarts the plan period. - Track technical screening criteria amendments for every activity covered by a CapEx plan. - Record whether the response is a plan update within two years or a CapEx KPI numerator restatement. - Disclose material changes in the plan and the reasons for those changes. - Explain the impact on the activity becoming Taxonomy-aligned and the expected timing. - Restate CapEx and OpEx KPIs for past reporting years covered by the plan when changes affect those KPIs. Sources for this answer: - [Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - Annex I sets the update-or-restate rule for amended technical screening criteria and requires disclosure of material CapEx plan changes. - [Commission Notice C/2023/305 on Article 8 disclosures](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - Commission guidance confirms that after completion, the expanded activity still needs to meet the relevant technical screening criteria. ### [What mistakes should teams remove before publication?](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md#what-mistakes-should-teams-remove-before-publication) *Module: [EU Taxonomy CapEx Plans FAQ: Article 8 CapEx KPI](/artifacts/eu/taxonomy-regulation/faq/capex-plans.md)* The main mistake is treating a broad transition budget, green-finance deck, or capital-allocation narrative as a Taxonomy CapEx plan without the Annex I evidence. A useful public answer should say which activity is affected, which CapEx route applies, what approval exists, what measures are planned, and how the amount flows into the KPI. - Remove unsupported claims that all planned transition spend can be counted as Taxonomy-aligned CapEx. - Do not include decorative or unrelated facility spend in a CapEx plan if it does not help meet the technical screening criteria. - Do not omit the approval date, because the plan period starts from approval. - Do not combine several activities into one number unless the activity-level presentation and allocation method remain clear. - Do not count mixed-use asset CapEx without a non-financial allocation metric based on verifiable evidence. Sources for this answer: - [Commission Notice C/2023/305 on Article 8 disclosures](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - FAQ 23, 26, 30, and 31 ground financing-source treatment, plan precision, mixed-use allocation, and prepayment treatment. - [Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - Binding source for CapEx KPI numerator treatment, contextual information, double-counting explanations, and restatement triggers. ### [What should teams do when EU Taxonomy delegated acts change?](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md#what-should-teams-do-when-eu-taxonomy-delegated-acts-change) *Module: [EU Taxonomy delegated act changes: what teams should check](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md)* Start from the official Commission delegated-acts page and the relevant EUR-Lex act, not from a saved copy of an old checklist. Regulation (EU) 2020/852 gives the Commission power to specify technical screening criteria and Article 8 disclosure information through delegated acts, so a change can affect both activity assessment and reporting presentation. - Confirm the source status: proposed, adopted, published in the Official Journal, applicable, corrected, or amended. - Map the act to the affected object: Climate Delegated Act criteria, Environmental Delegated Act criteria, Disclosures Delegated Act templates, DNSH criteria, or Article 8 KPIs. - Record the application date separately from the adoption or publication date. - Update only affected activities and disclosures; keep unchanged activity conclusions intact unless the source change reaches them. - Retain the official URL, short quote, affected internal owner, and evidence-change decision. Sources for this answer: - [Implementing and delegated acts - Taxonomy Regulation](https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/taxonomy-regulation_en?ref=sorena.io) - Commission page listing current Taxonomy Regulation delegated acts, latest public-feedback items, publication dates, and act status. - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32020R0852&ref=sorena.io) - Primary regulation authorising delegated acts for Article 8 disclosures and technical screening criteria. ### [Which delegated-act changes are visible in the official source set?](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md#which-delegated-act-changes-are-visible-in-the-official-source-set) *Module: [EU Taxonomy delegated act changes: what teams should check](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md)* The grounding set supports a narrow list of changes and milestones. The Commission delegated-acts page was last updated on 17 March 2026 and listed Commission Delegated Regulation (EU) 2026/73, Commission Delegated Regulation (EU) 2024/3215, Delegated Regulations (EU) 2023/2486 and 2023/2485, Delegated Regulation (EU) 2022/1214, and Delegated Regulation (EU) 2021/2178. - 2026/73: published in the Official Journal on 8 January 2026, amending the Disclosures Delegated Act and simplifying certain technical screening criteria for DNSH. - 2024/3215: published in the Official Journal on 19 December 2024, correcting certain language versions of Delegated Regulation (EU) 2021/2139. - 2023/2486: published in the Official Journal on 21 November 2023 as the Environmental Delegated Act, with criteria for water, circular economy, pollution prevention and control, and biodiversity. - 2023/2485: published in the Official Journal on 21 November 2023, amending the Climate Delegated Act by adding technical screening criteria for certain activities. - March 2026 proposals: public feedback was open until 14 April for proposed usability amendments to Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486; grounding does not support treating them as adopted. Sources for this answer: - [Implementing and delegated acts - Taxonomy Regulation](https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/taxonomy-regulation_en?ref=sorena.io) - Grounding source for the current delegated-act list and the 17 March 2026 public-feedback status. - [Commission Delegated Regulation (EU) 2024/3215](https://eur-lex.europa.eu/eli/reg_del/2024/3215/oj/eng?ref=sorena.io) - EUR-Lex source for the 2024 correction to certain language versions of Delegated Regulation (EU) 2021/2139. - [Commission Delegated Regulation (EU) 2023/2485](https://eur-lex.europa.eu/eli/reg_del/2023/2485/oj/eng?ref=sorena.io) - EUR-Lex source for the 2023 amendment to the Climate Delegated Act. ### [How should teams decide what to re-check?](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md#how-should-teams-decide-what-to-re-check) *Module: [EU Taxonomy delegated act changes: what teams should check](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md)* Do not reopen every Taxonomy conclusion by default. Re-check conclusions where the delegated act changes the applicable activity description, substantial-contribution criteria, DNSH criteria, minimum documentation expectation, Article 8 disclosure template, KPI methodology, or language that your local assessment relied on. - Eligibility: check whether the activity description, sector boundary, or NACE mapping changed. - Alignment: re-test substantial-contribution and DNSH criteria for affected activities only. - Disclosure: check Article 8 templates, KPI presentation, and qualitative disclosure requirements when the Disclosures Delegated Act changes. - Evidence: update source citations, screenshots or extracts, reviewer notes, and version dates used in assessment files. - Claims: remove or qualify website, sales, investor, or product statements that cite superseded criteria. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32020R0852&ref=sorena.io) - Grounding for regular review and amendment of technical screening criteria and for Article 8 disclosure obligations. - [Commission Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - EUR-Lex source for the Article 8 disclosure act covering content, presentation, and methodology for Taxonomy disclosures. ### [What evidence should be retained after a delegated-act review?](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md#what-evidence-should-be-retained-after-a-delegated-act-review) *Module: [EU Taxonomy delegated act changes: what teams should check](/artifacts/eu/taxonomy-regulation/faq/delegated-act-changes.md)* Keep the review evidence specific enough that a later reviewer can see why a conclusion changed or why no change was needed. The file should distinguish legal source status from internal implementation status. - Official source URL with ref=sorena.io and the date the team checked it. - Delegated act identifier, affected prior act, and status: proposal, adopted, published, applicable, correction, or amendment. - Affected activities, objectives, DNSH checks, disclosures, KPIs, and public claims. - Before-and-after conclusion for each affected assessment, including no-change decisions. - Owner, approval date, and next review trigger for future delegated acts or Commission notices. Sources for this answer: - [Implementing and delegated acts - Taxonomy Regulation](https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/taxonomy-regulation_en?ref=sorena.io) - Commission source for distinguishing latest public-feedback items from published Official Journal acts. - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32020R0852&ref=sorena.io) - Grounding for delegated act entry into force, Parliament and Council objection period, and Commission review of screening criteria. ### [What is the difference between Taxonomy eligibility and alignment?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md#what-is-the-difference-between-taxonomy-eligibility-and-alignment) *Module: [EU Taxonomy eligibility vs alignment: what is the difference?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md)* Taxonomy eligibility is about coverage. For Article 8 reporting, teams first map an economic activity to the activities described in the Taxonomy delegated acts and classify it as eligible or non-eligible for the relevant KPI or exposure. - Do not use an eligible activity label as a sustainability claim by itself. - Run eligibility before alignment, because an alignment assessment needs the relevant delegated-act activity and criteria. - Keep non-eligible, eligible-not-aligned, and aligned amounts separate in Article 8 evidence and explanations. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32020R0852&ref=sorena.io) - Article 3 provides the four conditions for an economic activity to qualify as environmentally sustainable; Article 8 requires undertakings in scope to disclose how and to what extent their activities are associated with environmentally sustainable economic activities. - [Commission Delegated Regulation (EU) 2021/2178 (Article 8 Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - The Disclosures Delegated Act implements Article 8 and uses separate eligible, non-eligible, and aligned disclosure concepts for undertaking KPIs. ### [How should teams apply the distinction in Article 8 reporting?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md#how-should-teams-apply-the-distinction-in-article-8-reporting) *Module: [EU Taxonomy eligibility vs alignment: what is the difference?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md)* For non-financial undertakings, Article 8 focuses on the proportions of turnover, capital expenditure, and operating expenditure associated with environmentally sustainable economic activities. The Disclosures Delegated Act and Commission FAQ explain that eligibility is reported before or alongside alignment, but eligibility reporting is not the same as proving alignment. - Map each activity or exposure to the delegated-act activity description before calculating eligible amounts. - Only report aligned amounts where the activity-specific technical screening criteria, DNSH criteria, and minimum safeguards assessment are evidenced. - Document the KPI basis used, such as turnover, CapEx, OpEx, total assets, GAR, or other financial-undertaking templates that apply to the reporting entity. Sources for this answer: - [FAQs on Article 8 eligibility reporting](https://finance.ec.europa.eu/system/files/2022-01/sustainable-finance-taxonomy-article-8-report-eligible-activities-assets-faq_en.pdf?ref=sorena.io) - Commission FAQ explains that large undertakings reported eligible and non-eligible activities first, and were not required in that initial phase to assess Taxonomy alignment. - [Commission Notice on Article 8 Disclosures Delegated Act](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - The 2023 Article 8 notice gives practical guidance on KPI allocation and requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities. ### [What evidence should support eligibility and alignment decisions?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md#what-evidence-should-support-eligibility-and-alignment-decisions) *Module: [EU Taxonomy eligibility vs alignment: what is the difference?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md)* The evidence pack should show both steps. Eligibility evidence should prove why the activity is described in the relevant Taxonomy delegated act. Alignment evidence should prove why the same activity meets the Article 3 conditions and the activity-level technical screening criteria. - Eligibility record: delegated-act activity name or section, mapped business activity, reporting entity boundary, and eligible/non-eligible conclusion. - KPI record: turnover, CapEx, OpEx, total assets, GAR, or other applicable KPI treatment, with the accounting or consolidation basis used. - Alignment record: substantial contribution test, DNSH assessment, minimum safeguards conclusion, and technical screening criteria evidence. - Allocation record: methodology and evidence for split-use assets, mixed activities, internal consumption, or pro-rata treatment. - Disclosure-control record: reviewer sign-off, unresolved assumptions, and wording checks that prevent eligible activity from being presented as aligned. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32020R0852&ref=sorena.io) - Article 3 ties alignment to substantial contribution, DNSH, minimum safeguards, and technical screening criteria; evidence should therefore cover each condition. - [Commission Notice on Article 8 Disclosures Delegated Act](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - The notice states that CapEx allocation to Taxonomy-aligned activities should be based on verifiable evidence, supporting documented allocation records for mixed-use assets. ### [What is the common mistake?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md#what-is-the-common-mistake) *Module: [EU Taxonomy eligibility vs alignment: what is the difference?](/artifacts/eu/taxonomy-regulation/faq/eligibility-vs-alignment.md)* The common mistake is to say that an eligible activity is Taxonomy-aligned without completing the alignment test. Eligibility only says the activity is covered by the Taxonomy activity list. Alignment says the activity satisfies the sustainability conditions and the activity-specific criteria. - Avoid saying an activity is environmentally sustainable when the evidence only supports eligibility. - Avoid merging eligible and aligned amounts in internal dashboards or external summaries. - Avoid unreviewed carry-forward classifications after delegated-act, activity, asset-use, or reporting-boundary changes. Sources for this answer: - [Commission Delegated Regulation (EU) 2021/2178 (Article 8 Disclosures Delegated Act)](https://eur-lex.europa.eu/eli/reg_del/2021/2178/oj/eng?ref=sorena.io) - The delegated act separates Taxonomy-eligible/non-eligible disclosures from Taxonomy-aligned KPI disclosures, so teams should preserve that distinction in reporting controls. - [FAQs on Article 8 eligibility reporting](https://finance.ec.europa.eu/system/files/2022-01/sustainable-finance-taxonomy-article-8-report-eligible-activities-assets-faq_en.pdf?ref=sorena.io) - The FAQ explains eligibility reporting as a preparation step for later alignment disclosures, not as a substitute for an alignment assessment. ### [Which financial KPIs apply under EU Taxonomy Article 8?](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md#which-financial-kpis-apply-under-eu-taxonomy-article-8) *Module: [EU Taxonomy Financial KPIs and Green Asset Ratio (GAR)](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md)* 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. - 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. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32020R0852&ref=sorena.io) - Grounds the Article 8 disclosure obligation and the delegated-act mandate for financial and non-financial undertaking methodologies. - [Commission Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02021R2178-20240101&ref=sorena.io) - Specifies the Article 8 KPI frameworks for financial undertakings and explains why separate financial KPIs are needed. ### [What does the Green Asset Ratio measure for credit institutions?](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md#what-does-the-green-asset-ratio-measure-for-credit-institutions) *Module: [EU Taxonomy Financial KPIs and Green Asset Ratio (GAR)](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md)* 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. - 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. Sources for this answer: - [Commission Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02021R2178-20240101&ref=sorena.io) - Defines GAR for credit institutions and the exposure categories used in GAR calculations. - [Commission Notice 2022/C 385/01 on Article 8 Disclosures](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022XC1006%2801%29&ref=sorena.io) - Clarifies implementation of the Disclosures Delegated Act, including that eligible activities are not the same thing as KPI denominators. ### [Which timing rules and exclusions matter most for GAR and financial KPIs?](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md#which-timing-rules-and-exclusions-matter-most-for-gar-and-financial-kpis) *Module: [EU Taxonomy Financial KPIs and Green Asset Ratio (GAR)](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md)* 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. - 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. Sources for this answer: - [Commission Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02021R2178-20240101&ref=sorena.io) - Grounds financial undertaking KPI timing, exclusions, and use of counterparty KPI weighting. - [Commission Notice C/2023/305 on the Disclosures Delegated Act](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - Provides official Article 8 implementation guidance for Taxonomy-eligible and Taxonomy-aligned reporting by undertakings. ### [What evidence should accompany financial undertaking KPI disclosures?](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md#what-evidence-should-accompany-financial-undertaking-kpi-disclosures) *Module: [EU Taxonomy Financial KPIs and Green Asset Ratio (GAR)](/artifacts/eu/taxonomy-regulation/faq/financial-kpis-and-gar.md)* 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. - 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. Sources for this answer: - [Commission Delegated Regulation (EU) 2021/2178 (Disclosures Delegated Act)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02021R2178-20240101&ref=sorena.io) - Annex XI requires qualitative information to accompany financial undertaking quantitative KPIs. - [Commission Notice C/2023/305 on the Disclosures Delegated Act](https://eur-lex.europa.eu/eli/C/2023/305/oj/eng?ref=sorena.io) - Supports Article 8 implementation guidance on Taxonomy-eligible and Taxonomy-aligned reporting. ### [What are minimum safeguards under Article 18 of the EU Taxonomy Regulation?](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md#what-are-minimum-safeguards-under-article-18-of-the-eu-taxonomy-regulation) *Module: [EU Taxonomy minimum safeguards FAQ: Article 18 evidence](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md)* For an economic activity to qualify as environmentally sustainable under Article 3, it must make a substantial contribution, do no significant harm to the environmental objectives, and be carried out in compliance with the minimum safeguards in Article 18. - Start with the undertaking that carries out the activity, not only the parent policy owner. - Keep the Article 18 source citation with the activity-level alignment assessment. - Do not treat eligibility, technical screening criteria, DNSH, or minimum safeguards as interchangeable tests. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32020R0852&ref=sorena.io) - Primary legal source for Article 3 and Article 18 minimum safeguards. - [Final Report on Minimum Safeguards](https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-minimum-safeguards_en.pdf?ref=sorena.io) - Platform advice explaining the purpose and practical interpretation of Article 18; the report states it is not an official Commission document. ### [Which topics should a minimum safeguards review cover?](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md#which-topics-should-a-minimum-safeguards-review-cover) *Module: [EU Taxonomy minimum safeguards FAQ: Article 18 evidence](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md)* Article 18 names the OECD Guidelines, the UN Guiding Principles, ILO fundamental conventions, and the International Bill of Human Rights. The Platform final report filters those references into four practical minimum-safeguards topics: human rights including labour and consumer rights, bribery and corruption, taxation, and fair competition. - Human rights due diligence: policy commitment, impact assessment, action, tracking, communication, and remediation where the undertaking causes or contributes to impacts. - Labour rights: freedom of association, collective bargaining, elimination of forced labour, abolition of child labour, and elimination of discrimination. - Governance topics from the Platform advice: bribery and corruption, taxation, and fair competition. - Records showing how these topics are considered for the activity, business relationships, suppliers, clients, or exposures that support the alignment claim. Sources for this answer: - [Final Report on Minimum Safeguards](https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-minimum-safeguards_en.pdf?ref=sorena.io) - Platform report identifying the four core topics for Article 18 minimum safeguards advice. - [UN Guiding Principles on Business and Human Rights](https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf?ref=sorena.io) - Article 18 reference for business responsibility to respect human rights and human-rights due diligence. ### [Who must show compliance with minimum safeguards?](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md#who-must-show-compliance-with-minimum-safeguards) *Module: [EU Taxonomy minimum safeguards FAQ: Article 18 evidence](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md)* The Article 18 requirement sits with the entity performing the economic activity and claiming that the activity is Taxonomy-aligned. For financial undertakings calculating KPI exposure to other undertakings, Commission guidance says the minimum-safeguards evidence is normally obtained as adequate documentary evidence from the undertaking to which they are exposed. - Non-financial undertaking: keep evidence that the activity reported as aligned meets Article 18. - Financial undertaking using counterparty KPIs: retain adequate documentary evidence that the exposed undertaking meets minimum safeguards. - Retail or public-authority use-of-proceeds exposures: focus on evidence from the producer or service provider where the guidance points to that documentary evidence. - Insurance and reinsurance underwriting: screen relevant business relationships for potential safeguard breaches when claiming eligible underwriting activities as aligned. Sources for this answer: - [Draft Commission Notice on Article 8 reporting for financial undertakings](https://ec.europa.eu/finance/docs/law/231221-draft-commission-notice-eu-taxonomy-reporting-financials_en.pdf?ref=sorena.io) - Grounded Commission FAQ text on the level at which minimum safeguards compliance is assessed for financial-undertaking KPI reporting. - [Final Report on Minimum Safeguards](https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-minimum-safeguards_en.pdf?ref=sorena.io) - Platform report includes practical advice for banks, insurance companies, project finance, green bonds, SMEs, sovereigns, and sub-sovereigns. ### [What evidence should teams retain before reporting an activity as aligned?](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md#what-evidence-should-teams-retain-before-reporting-an-activity-as-aligned) *Module: [EU Taxonomy minimum safeguards FAQ: Article 18 evidence](/artifacts/eu/taxonomy-regulation/faq/minimum-safeguards.md)* Keep evidence that a reviewer can follow from the Article 18 source to the activity, undertaking, procedures, risk topics, and final alignment claim. A policy PDF alone is weak if it does not show whether the undertaking has implemented and operated relevant due-diligence or governance procedures. - Activity and undertaking identifier for the Taxonomy-aligned claim. - Article 18 citation and the international standards relied on for the review. - Procedure evidence for OECD Guidelines and UNGP alignment, including due-diligence steps and remediation path where relevant. - Labour-rights evidence mapped to the ILO fundamental principles and rights at work. - Governance evidence for bribery and corruption, taxation, and fair competition where relevant to the undertaking's own activities. - Documentary evidence received from counterparties or producers when a financial undertaking uses another undertaking's alignment for KPIs. - Exception note where source coverage, counterparty evidence, or operating facts are not sufficient to support an aligned claim. Sources for this answer: - [Regulation (EU) 2020/852 (Taxonomy Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32020R0852&ref=sorena.io) - Primary source tying minimum safeguards to Article 3 Taxonomy alignment. - [UN Guiding Principles on Business and Human Rights](https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf?ref=sorena.io) - Source for human-rights due-diligence evidence expectations used by Article 18. ## FAQ Pagination - Canonical index (page 1): [/artifacts/eu/taxonomy-regulation/faq/items](/artifacts/eu/taxonomy-regulation/faq/items.md) - Page 1 rule: `/page/1` is intentionally not generated; use the canonical index markdown URL. - Current page: 2 of 3 Pages: [1](/artifacts/eu/taxonomy-regulation/faq/items.md) | [2](/artifacts/eu/taxonomy-regulation/faq/items/page/2.md) | [3](/artifacts/eu/taxonomy-regulation/faq/items/page/3.md) [Previous page](/artifacts/eu/taxonomy-regulation/faq/items.md) | [Next page](/artifacts/eu/taxonomy-regulation/faq/items/page/3.md) *Recommended next step* *Placement: after evidence section* ## Turn EU Taxonomy answers into reportable evidence Use this EU Taxonomy FAQ hub to connect activity mapping, technical screening criteria, DNSH checks, minimum safeguards, and Article 8 KPI evidence before reporting or publishing sustainability claims. - [Open Research Copilot](/solutions/research-copilot.md): Answer EU Taxonomy implementation questions with cited source material. - [Discuss EU Taxonomy implementation](/contact.md): Review activity scope, delegated-act criteria, evidence records, and Article 8 reporting steps with Sorena. --- [Privacy Policy](https://www.sorena.io/privacy) | [Terms of Use](https://www.sorena.io/terms-of-use) | [DMCA](https://www.sorena.io/dmca) | [About Us](https://www.sorena.io/about-us) (c) 2026 Sorena AB (559573-7338). 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