EU Taxonomy Article 8 KPI disclosure workflow

Start the workflow by identifying which disclosure route applies to the reporting entity. Non-financial undertakings use Annex I and the Annex II templates; asset managers use Annexes III and IV; credit institutions use Annexes V and VI; investment firms use Annexes VII and VIII; insurance and reinsurance undertakings use Annexes IX and X. Financial undertakings also use Annex XI qualitative information.

The first evidence register should record the reporting entity, reporting period, applicable annexes, template owner, source systems, and whether each economic activity is Taxonomy-eligible, Taxonomy-aligned, or Taxonomy-non-eligible. Eligibility means the activity is described in the relevant delegated acts, even if it does not meet the technical screening criteria.

For non-financial undertakings, Article 8 disclosures revolve around the proportion of turnover, capital expenditure, and operating expenditure associated with Taxonomy-aligned activities. The workflow should tie each numerator and denominator back to accounting records and the required Annex I methodology, not to an isolated sustainability spreadsheet.

The turnover KPI uses the part of net turnover from products or services associated with Taxonomy-aligned economic activities as numerator and net turnover as denominator. The CapEx denominator covers additions to tangible and intangible assets during the financial year before depreciation, amortisation, remeasurement, and specified fair value effects, while the CapEx numerator is limited to qualifying aligned assets or processes, qualifying CapEx plans, or qualifying purchases of aligned output and individual measures. The OpEx denominator covers direct non-capitalised costs such as research and development, building renovation measures, short-term lease, maintenance and repair, and other direct servicing expenditures; the numerator is the aligned part specified in Annex I.

Financial undertakings need a separate dependency workflow because their KPIs often rely on counterparties' most recently available data and KPIs. Credit institutions, for example, disclose the Green Asset Ratio using methodologies in Annex V, while Article 7 sets common rules for excluded exposures and treatment of specific instruments.

The Disclosures Delegated Act excludes exposures to central governments, central banks, and supranational issuers from both the numerator and denominator of financial-undertaking KPIs, excludes derivatives from the numerator, and excludes exposures to undertakings not obliged to publish non-financial information under Articles 19a or 29a of Directive 2013/34/EU from the numerator. Where environmentally sustainable bonds or debt securities finance specific identified Taxonomy-aligned activities, Article 7 allows inclusion up to the value of the financed aligned activities on the basis of investee information, with discounting to avoid double counting.

Before publication, the workflow should verify that KPI figures, accompanying disclosures, and cross-references live in the same parts of the non-financial statement as required by Article 8 of the Disclosures Delegated Act, or that the statement contains clear cross-references to where the accompanying disclosures appear.

For non-financial undertakings, the contextual-information review should cover accounting policy, assessment of compliance with Regulation (EU) 2020/852, contribution to multiple objectives, disaggregation of KPIs, key drivers of turnover changes, CapEx-plan information, and OpEx explanations. If voluntary disclosures are added, they should not contradict or misrepresent mandatory disclosures, should not be more prominent than mandatory disclosures, and should explain the basis, methods, and difference from mandatory reporting.