The EU Taxonomy is a cornerstone of the European Union's sustainable finance framework. It is a classification system that helps companies and investors identify “environmentally sustainable” economic activities to make sustainable investment decisions. 
 
In our latest EU Taxonomy Reporting Review, Morningstar Sustainalytics examine companies' progress on disclosures and the investments required to transition to a more sustainable economy.

Key findings of this report include:

• Taxonomy aligned expenditures (capex) continued to rise in 2024, bringing the three-year cumulative total to USD 900 billion.
• Taxonomy-alignment levels vary significantly across sectors. Utilities stands out as the sector with the highest alignment levels, while Energy shows some of the lowest levels.
• Climate change mitigation remains the most targeted environmental objective.
• Fund-level taxonomy-alignment levels are low. Only 15% of Article 8 funds and 39% of Article 9 funds have aligned capex greater than 10%, respectively.

Download the report to learn more.