Consulted on the draft directive by the Commission
The European Commission has adopted a new Delegated Act on July 4, 2025, aimed at simplifying EU Taxonomy reporting requirements for companies and banks. The changes, set to take effect from January 1, 2026, will cover the 2025 financial year [1][2][3].
Companies can opt to implement the changes starting from the 2026 financial year if more convenient. Key details of the Delegated Act include exemptions for financially insignificant entities, a reduction in reporting burden, and simplification of criteria [4][5].
Financially insignificant entities will be exempted from assessing Taxonomy alignment for economic activities that are not financially material to their business. Activities are considered non-material if they represent less than 10% of the company’s revenue, capital expenditures (CapEx), or operational expenditures (OpEx). Furthermore, companies are fully exempt from assessing alignment for their entire operational expenditure when it is non-material for their business model [4].
The Delegated Act substantially streamlines the reporting templates by cutting the number of reported datapoints by around 64% for non-financial companies, significantly reducing administrative burdens while maintaining the Taxonomy's core objectives [4][5].
Among other simplifications, the act includes efforts to ease the application of the "Do No Significant Harm" (DNSH) criteria, which are part of the sustainability assessment framework within the Taxonomy [1].
The act amends the existing Taxonomy Disclosure, Climate, and Environmental Delegated Acts, ensuring that the simplifications are integrated into the current regulatory framework [1][3].
After adoption, the Delegated Act was transmitted to the European Parliament and the Council for a standard scrutiny period of four months, which can be extended by two additional months. Only after this period will the act become binding [2][3].
This Delegated Act reflects the EU's broader goal of making sustainability reporting more manageable for companies and financial institutions by easing compliance burdens without compromising the ambition of the EU Taxonomy to promote sustainable economic activities [1][4][5].
The changes are being implemented in Frankfurt, Germany, as part of a broader EU initiative to reduce bureaucracy. The EU Commission's delegated act aims to streamline the reporting forms for companies and banks associated with the EU Taxonomy, which is a framework for environmentally sustainable economic activities. The new delegated act specifies what was previously announced by the EU Commission in February [1][3][4].
The changes are focused on companies and banks operating within the EU, with the aim of reducing the burden of Taxonomy compliance for financially insignificant banks and firms. Banks and firms with less than 10% of total revenues, investment expenditures, or operational expenditures (CapEx/OpEx) are exempt from determining Taxonomy compliance [1][4].
Sources: [1] European Commission. (2025). Press release: Simplification of EU Taxonomy reporting for companies and financial institutions. Retrieved from
Businesses and financial institutions operating within the EU can expect simplified EU Taxonomy reporting requirements starting from the 2026 financial year, as the European Commission has adopted a new Delegated Act aimed at reducing bureaucracy. Financially insignificant entities will be exempted from assessing Taxonomy alignment for economic activities that are not financially material to their business, as activities are considered non-material if they represent less than 10% of the company’s revenue, capital expenditures (CapEx), or operational expenditures (OpEx).
