ESMA final report on taxonomy and NFRD


On 1st March 2021, the European Securities and Markets Authority (ESMA) published its final report on advice under Article 8 of the Taxonomy Regulation, which covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD).

The recommendations define the Key Performance Indicators (KPIs) disclosing how, and to what extent, the activities of businesses that fall within the scope of the NFRD qualify as environmentally sustainable under the Taxonomy Regulation. ESMA’s advice on the KPIs to be disclosed by non-financial undertakings provides the definitions that entities should use for the calculation of the three metrics:

  • The turnover KPI,

  • The capital expenditure (CapEx), and

  • The operating expenditure (OpEx) that asset managers in the scope of the NFRD should disclose.

For asset managers, the proposals set out the KPI that they should disclose, the methodology to be applied to that KPI and recommendations for the development of a coefficient methodology to assess taxonomy-alignment of investments in investee companies that do not report under the NFRD.