THE EU TAXONOMY – A PERSPECTIVE
The EU taxonomy for sustainable investments is one of the measures taken in the EU action plan in financing a sustainable growth. It provides the opportunity to identify and compare investments that contributes to achieve a sustainable economy. The idea is to form the basis for future standards and labeling of sustainable financial products. Nordic Waterproofing is to some extent covered by the regulation.
In 2019, the European Commission presented a new growth strategy, the European Green Deal, with the aim of reducing net greenhouse gas emissions to zero by 2050 and supporting economic growth through the most efficient and sustainable use of natural resources.
Regulation (EU) 2020/852 of the European Parliament and of the Council (the Taxonomy regulation) was introduced as a common classification system for sustainable economic activity. The purpose is to scale up sustainable investments and redirect capital flows to technologies and companies that are considered sustainable. Nordic Waterproofing views the implementaion of the Taxonomy regulation as very positive.
It has been a clearly stated strategy for us to grow in sustainable construction solutions, which was one of the reasons why the acquisitions in prefabricated
roof and wall elements as well as green solutions for urban environments were implemented.
To be eligible according to the regulation, a significant contribution through internal measures must be made by Nordic Waterproofing. The contribution can be made through phasing out fossil fuels, and / or by making it easier for other stakeholders, for example products produced with lower CO2 emissions such as prefabricated elements in wood.
EU taxonomy is still evolving, and it is important to note that current regulation does not cover all sustainable market activities. In the transition to zero carbon dioxide emissions, the emphasis is on the most carbon-intensive industries and/or the areas with the highest potential for improvement. Nordic Waterproofing is mainly a supplier of waterproofing solutions, which are not explicitly mentioned in the current regulation as a component in building solutions. Thus the Group has only a few relevant economic activity categories to report.
Nordic Waterproofing’s annual report for 2021 provides comprehensive information on the Group’s sustainability results, including details on greenhouse gas emissions and climate impact in addition to the regulatory requirements in the climate economy and the EU taxonomy in general. As the legislation is still evolving and is expected to expand in to other areas that are relevant to our products and operations, the future taxonomy will accordingly be updated.
ACTIVITIES ELIGIBLE WITH BY THE TAXONOMY
All operations of the Group have been evaluated and assessed as to whether they are eligible with the taxonomy definitions or not. In principle, the entire Group’s operations can be considered to fall under the section 3.5 Manufacture of energy-efficient equipment for buildings.
The Group’s operations within bitumen and EPDM based waterproofing constitute parts of a building with established limit values for the complete building but not for the parts provided by us. Our products are currently not considered to be covered by the taxonomy definitions.
Our manufacturing of prefabricated roof and wall elements in wood, established limit values are met by our operations and have been included in the calculations.
The same applies to our urban green solutions, thus also considered to be covered by the taxonomy and are included in the calculations.
Accounting principles
In addition to EU Regulation (EU) 2020/852 (published 6.7.2021), Article 10 states that non-financial corporations shall only report the proportion of economic activities that are covered by the taxonomy and are not covered by their total turnover, capital and operating expenditures and relevant qualitative information for the reporting for the financial year 2021.
One of the main targets of the EU taxonomy is to prevent “green washing”. This is respected by Nordic Waterproofing. We have taken a conservative stance when reporting taxonomy-eligible data, which does not include items that are not specifically mentioned in the taxonomy.
The taxonomy stipulates that companies comment on how double counting has been avoided in the taxonomy- supported economic activities. This has been done based on our cost structures and ensures that the cost elements are separate for each business, which has been facilitated by the limited amount of transactions made between different businesses.
Turnover
Turnover include external sales from operations covered by the taxonomy. The denominator is Nordic Waterproofing’s total turnover during the financial year 2021 and the numerator includes turnover of prefabricated roof and wall elements of wood as well as of products and services for green urban environments.
Capital expenditure
Capital expenditure include capital expenditures in activities that are covered by the taxonomy. The denominator is the Group’s total capital expenditure in tangible fixed assets. Investments in activities covered by the taxonomy are included in the numerator.
Operating expenditure
Operating expenditure refer to expenditure within activities that are covered by the taxonomy and include all direct non-capitalized costs that relate to research and development (R&D), building renovation measures, short-term lease, maintenance and repair, as well as direct expenditures relating to the day-to-day servicing of assets, i.e. not the total operating expenses, but only expenses associated with maintaining the value of assets linked to eligible products.
Based on the above, this means that operating expenditures does not correspond to total operating expenditures, but only, as mentioned above, expenditures associated with the continuous and appropriate functioning of the asset. This means, for example, that the cost of electricity can be included in opex in cases where the electricity is required for maintenance or service of the tangible fixed asset. However, electricity used in production cannot be included.
