Illustrative of disclosures related to the Article 8 of the EU Taxonomy for the Automotive Industry
As you may know, the Article 8 of the EU Taxonomy is now applicable for all large EU Public Interest Entities (PIE) as from FY21 for the eligibility disclosures and as from FY22 for the alignment disclosures including the qualitative information (i.e. rationale and assumptions taken) and quantitative information, i.e the proportion of eligibility and alignment of Turnover, CapEx and OpEx (the key performance indicators or KPI).
Our PwC EU Taxonomy experts worked on an illustrative of the Article 8 related disclosures in accordance with the Taxonomy Regulation (Regulation (EU) 2020/852) and the corresponding delegated acts for FY22.
This illustrative is meant to show illustrative good reporting practices and to initiate further stakeholders’ dialogue to establish a best practice for Taxonomy reporting. In doing so, the illustrative disclosures clearly exceed the minimum legally required disclosures. The actual disclosures should be adapted by each undertaking depending on its size, complexity and nature of business.
Given that the regulation is still in its early days, the EU Taxonomy and the corresponding delegated acts contain terms and criteria that are subject to considerable judgment. It should therefore be noted that the assessment of Taxonomy-eligibility and Taxonomy-alignment in particular will require gradual improvement over time. While the PwC Illustrative was put together as a practical example to guide your own disclosures under Article 8 of the Taxonomy, we hope that it will serve as a transparency exercise and will initiate further dialogue to establish a best practice for Taxonomy reporting. It also includes supporting commentary that would not be part of the reporting but provides additional insight to understand the choices made to reach the disclosures.
We believe that transparency is a key principle that will not only accelerate the quality of Taxonomy reporting in a collective sense, but will also help explain variance in eligibility and alignment KPI reporting where the application of any calculations has changed since the previous reporting period, which in most cases is bound to occur. Providing the assumptions behind the KPI calculations and the adopted methodologies, which may change with time as Taxonomy reporting evolves, would be instrumental to explain why those changes result in more reliable and relevant information.
The Illustrative sample of Article 8 Taxonomy Regulation disclosures is aligned with the CSSF and ESMA guidelines and enforcement priorities and thus represents the encouraged level of reporting.
To show the different reporting nuances across sectors, we are currently working on a similar Illustrative for the Pharmaceutical sector.
Related content
Follow us
