The European Union introduced its taxonomy in 2020. The regulation aims to help companies and investors identify environmentally sustainable economic activities to make sustainable investment decisions.

In our first EU Taxonomy Reporting Review, Morningstar Sustainalytics examined taxonomy alignment on key performance indicators (KPIs) for more than 1,300 non-financial companies to assess the progress companies are making in reporting their taxonomy alignment.

Key findings of this report include:

• Reported capital investments reached USD 500 billion, but average taxonomy-alignment levels have not increased.
• Non-financial companies reporting above-zero data have 28% of their capital investments (capex) aligned with the taxonomy, on average.
• Alignment levels are expected to increase starting next year, when alignment reporting on the four new environmental objectives of the taxonomy becomes mandatory. Currently, reporting on these objectives is limited.

Download the report to learn more.