In an era of rising investor scrutiny and regulatory shifts, sustainable finance and corporate accountability have become strategic imperatives. Governments and consumers alike expect businesses to take on more environmental responsibility with their operations.
While the adoption of sustainable practices is surely growing across the EU, the ever-changing regulatory landscape does complicate organizational compliance. To better understand the expectations placed upon European enterprises, business leaders must begin with the EU Taxonomy.
What is the EU Taxonomy?
The EU Taxonomy is the European Union’s answer to one of the most pressing challenges in the way of sustainability adoption: inconsistency. Without a clear and standardized framework to classify the environmental impact of business activities, there’s no objective line between sustainable and unsustainable practices.
Fortunately for enterprise leaders, that issue is addressed by the EU Taxonomy. By establishing science-backed criteria for qualifying a “green activity”, the EU Taxonomy offers a structured and measurable method for companies to identify, disclose and improve their sustainability performance.
The EU Taxonomy currently assesses practices based on six essential environmental goals:
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of marine resources
- Transition towards circular economy
- Pollution control and prevention
- Protection and restoration of biodiversity
Why is the EU Taxonomy Relevant Today?
Following its introduction in 2022, the EU Taxonomy faced its biggest regulatory updates with the release of the Omnibus Simplification Package earlier this year. Introduced by the European Commission in February 2025, the Omnibus Package brings about notable changes to the sustainability reporting landscape, particularly for companies falling under the Corporate Sustainability Reporting Directive (CSRD).
- Higher Thresholds for CSRD Applicability: Only companies with more than 1,000 employees, and turnover over €450 million, will be required to submit detailed Taxonomy-aligned disclosures.
- Materiality Thresholds Introduced: If your green revenue, capital expenditure (CapEx), or operational expenditure (OpEx) is less than 10% of your total figures, you may opt out of certain disclosures, reducing your reporting burden.
- OpEx Becomes Voluntary: Companies will no longer be obligated to report Taxonomy-aligned operating expenses unless they exceed 25% of total revenue, simplifying one of the most complex areas of the regulation.
These revisions are intended to balance the EU’s ambitious climate goals with the need for regulatory clarity and reduced administrative burden. Different organizations face differing expectations now, making voluntary alignment a competitive advantage in the dynamic regulatory landscape.
Taxonomy Metrics You Need to Know
If your business falls within the scope of the Taxonomy, today or in the future, you’ll need to report on three key performance indicators (KPIs):
- Green Revenue – The percentage of a company’s turnover generated by Taxonomy-aligned activities.
- Green CapEx – The proportion of investment in assets or processes that meet sustainability criteria.
- Green OpEx – Operating expenses tied to sustainability-related functions, such as R&D or facility upgrades.
While these KPIs offer critical insights for stakeholders, gathering and verifying the necessary data across your organization still presents a real challenge. That’s where SustainSuite comes in.
How SustainSuite Reduces the Administrative Burden
Enterprise leaders looking to strengthen their sustainability practices need not look further than SustainSuite to help them meet their auditing and disclosure requirements. In adhering to the EU Taxonomy, the platform can help you generate detailed reports in just five simple steps:
- Detect Eligible Activities
By employing the NACE code classification and our integrated activity-mapping tools, you can quickly and reliably determine which of your company’s operations fall within the scope of the EU Taxonomy.
- Assess Eligibility and Gather Data
After identifying the eligible business activities, you must track the revenues, investments and expenses linked to them. The information can be organized on SustainSuite’s user-friendly dashboards, enabling you to track financial KPIs across departments.
- Verify Assessment Criteria
Using SustainSuite, you can simply classify your activities as per their impact on the Taxonomy’s six primary environmental goals.
- Determine Taxonomy Alignment
Once your eligible activities have been evaluated against the necessary criteria, SustainSuite calculates the proportion of your KPIs that are fully aligned.
- Generate Your EU Taxonomy Report
With all the information analyzed and processed, you can generate your Taxonomy report in just a few clicks, complete with standardized tables and qualitative context.
Why EU Taxonomy Reporting Matters Beyond Compliance
While Taxonomy alignment is becoming a regulatory necessity for many companies, its strategic benefits go far beyond compliance.
1. Enhance Investor Confidence
As sustainable finance grows, investors are looking for more clarity and transparency. EU Taxonomy alignment provides both. With clear, auditable metrics, your company becomes a more attractive investment opportunity, opening doors to green finance.
2. Benchmark Sustainability Performance
Reporting aligned KPIs helps you understand where you stand, and where you can improve. Using SustainSuite’s analytics, businesses can set meaningful goals and track their performance against EU benchmarks.
3. Reduce the Risk of Greenwashing
Unsubstantiated claims of sustainability are no longer enough. The Taxonomy framework forces companies to back up their environmental statements with verified, data-driven evidence. SustainSuite’s methodology helps protect your brand from reputational risk.
4. Prepare for the Future
Even if your organization is not currently subject to mandatory reporting, the EU’s policy trajectory is clear: more sectors and more companies will eventually fall under the CSRD and EU Taxonomy scope. SustainSuite helps you prepare now so you can lead the charge.
What Sets SustainSuite Apart?
We know sustainability reporting isn’t just about ticking boxes. It’s about building systems that help your business thrive in a fast-changing world. SustainSuite is more than just a reporting tool—it’s a platform built by industry professionals with deep sustainability expertise.
- Purpose-Built for EU Regulations: SustainSuite is updated in real-time to reflect changes in CSRD, EU Taxonomy, and related frameworks.
- Modular and Scalable: Whether you’re a mid-size enterprise or part of a larger multinational group, our platform adapts to your organizational structure and reporting needs.
- User-Friendly and Actionable: No jargon, no complexity — just smart tools that help your team focus on making an impact.
The Road Ahead: Your Next Step in Sustainability Leadership
The EU Taxonomy is redefining what it means to be a sustainable business in Europe. With clearer criteria, measurable impact metrics, and growing expectations from stakeholders, your sustainability story is more important than ever.
SustainSuite gives you the clarity, tools, and confidence to write that story. Whether you’re facing your first EU Taxonomy disclosure or looking to enhance existing ESG strategies, we’re here to help you turn regulatory complexity into a strategic opportunity.
Ready to simplify your EU Taxonomy journey? Request a demo and discover how SustainSuite can make compliance easier, faster, and more impactful.
