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The European Union Platform on Sustainable Finance has reacted to the Commission's request for feedback on a draft regulation amending the Taxonomy Delegated Acts. While endorsing numerous proposed changes, the Platform expresses worries regarding the reduction in the scope of Taxonomy reporting outlined in the "Omnibus" proposals for the Corporate Sustainability Reporting Directive (CSRD). It suggests updates such as partial Taxonomy-alignment reporting and clarifying materiality thresholds. Additionally, it recommends issuing guidance to simplify implementation and introducing a real-time query mechanism.

Proposed Adjustments to Strengthen Taxonomy Reporting

The EU Platform emphasizes the importance of maintaining comprehensive Taxonomy reporting standards. It advocates for an inclusive regime where all companies can report partial alignment with the Taxonomy. Furthermore, the materiality threshold should apply to cumulative exposure rather than individual activities. Non-SME firms below the 1,000-employee mark should focus on essential standards, including Taxonomy alignment. Banks' key performance indicators concerning trading books, fees, and commissions should be postponed until 2027.

In order to enhance the effectiveness of Taxonomy reporting, several strategic adjustments have been recommended by the EU Platform. These include establishing a system that enables all enterprises to report partial alignment with the Taxonomy. This ensures broader participation while recognizing varying levels of commitment across industries. Clarifying the materiality threshold is another critical step, ensuring it addresses cumulative exposure rather than focusing solely on isolated economic activities. For smaller non-SME entities, the emphasis should shift towards prioritizing fundamental standards, particularly those tied to Taxonomy alignment. Moreover, delaying certain banking KPIs like trading books, fees, and commissions until 2027 allows these institutions more time to adapt without compromising accuracy or relevance in their reports.

Facilitating Simplified Implementation and Real-Time Support

Beyond structural modifications, the Platform proposes supplementary measures to ease the Taxonomy's adoption. Issuing additional guidance could streamline the process, making it simpler for organizations to implement effectively. Establishing a mechanism for addressing Taxonomy-related inquiries in real-time would further bolster its usability.

To ensure smoother integration of the Taxonomy framework into corporate operations, the EU Platform highlights two significant facilitative actions. Firstly, providing enhanced guidance documents can significantly assist businesses in navigating the complexities associated with implementing the Taxonomy regulations. Such resources will clarify ambiguities and offer practical solutions tailored to diverse organizational needs. Secondly, creating a dynamic platform capable of handling Taxonomy-related questions promptly enhances user experience and fosters greater confidence among stakeholders. This proactive approach not only supports immediate problem resolution but also encourages continuous improvement through feedback loops established within the community. Together, these initiatives aim at reducing barriers to entry and promoting widespread acceptance of sustainable finance practices across Europe.