Taxonomy reporting means eligible-versus-aligned KPIs

Large undertakings that prepare a sustainability report under årsredovisningslagen must disclose how far their activities are associated with environmentally sustainable economic activities under the EU taxonomyFAR. Non-financial undertakings calculate and report three financial key figures as percentagesFAR, describe their accounting policies, and give specific disclosures on activities considered immaterial and therefore left out of the assessment.

Turnover means the share of turnover by economic activity that is covered (eligible) by the taxonomy versus compatible with or sustainable under its criteria (aligned)FAR. Capital expenditure (CapEx) means the share of capital expenditure by activity that is eligible versus alignedFAR. Operating expenditure (OpEx) means the share of operating expenditure by activity that is eligible versus alignedFAR. Key figures and disclosure duties for financial undertakings vary by firm type, such as banks, investment firms, asset managers and insurers or reinsurers, and by activity such as lending, investment and insurance.

An activity counts as sustainable only where three cumulative conditions are metFAR. It must make a substantial contribution to at least one of the six environmental objectives, such as lower emissions or better resource efficiency; small or indirect improvements are not enoughFAR. It must cause no significant harm to any of the other objectives, assessed as a whole even where the activity is positive in one areaFAR. And it must meet minimum safeguards on human rights and labour conditions under OECD and UN guidelines, from basic employee rights to safe conditions and reasonable payFAR.

The six objectives are climate-change mitigation, climate-change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. Whether an activity meets them is set by strict technical screening criteria in Commission delegated acts, plus the minimum safeguardsFAR.

The scope basis is now the sustainability report under årsredovisningslagen for all large undertakings covered by the Taxonomy RegulationFAR. They must not only report the extent of sustainable activities but be able to show the technical criteria are metFAR. The staged-implementation timeline for 2022, 2023 and the early-2026 Omnibus simplification proposal no longer frames the page; the operative content is the reporting duty itself.

Taxonomy reporting is a mandatory part of the sustainability reportFAR. The auditor overview review of the sustainability report therefore also covers the taxonomy reportingFAR. The review gives limited assuranceFAR: the auditor gathers sufficient appropriate evidence to raise confidence for investors and lenders, but with fewer and less in-depth procedures than a financial-statement auditFAR, so the risk that material misstatements remain is higher and the conclusion is weaker. Quality requirements for reporting are the same regardless of assurance level.

In practice the auditor checks the company assessment of activities claimed to meet the three conditionsFAR, reviews that the minimum-safeguards analysis covers all areas such as human rights, anti-corruption, taxation and fair competition, and verifies that the indicators, for example the shares of turnover or investment meeting the criteria, are calculated and presented in line with the taxonomy. National standards may apply during transition until the Commission adopts EU review standards, expected by October 2026; FAR has issued a Swedish recommendation and IAASB has adopted ISSA 5000 globally.

Legal basis: Europaparlamentets och rådets förordning (EU) 2020/852 on the taxonomy with Articles 3 and 8 on sustainable activities and reporting, Commission delegated acts on technical screening and disclosures, and årsredovisningslagen (1995:1554) on the sustainability report with översiktlig granskning.