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What is the Procedure for Taxonomy-eligible Activities?

March 15, 2023

News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)

The February newsletter provided general information about the Application of the EU Taxonomy Regulation. In this month’s newsletter, we go into more detail on the procedure – the taxonomy-eligible activities, including green activities, enabling activities and transition activities.

Green activities

Green activities or direct economic activities are economic activities that can directly make a significant contribution to one of the six environmental objectives.

The Climate Taxonomy Regulation contains economic activities which, in the view of the EU Commission, potentially have the greatest positive impact on the achievement of the first two environmental objectives. According to the EU Commission, these economic activities cover about 40% of the economic activities of listed companies in sectors that are responsible for about 80% of direct greenhouse gas emissions.

In concrete terms, this means; Mapping of own economic activities with the economic activities listed in the Climate Taxonomy Regulation.

Enabling activities

In principle, so-called enabling activities can also be classified as taxonomy-compliant. Prerequisites for this are:

  • The economic activity directly enables other activities to make a significant contribution to one or more of the six environmental objectives.
  • Given their economic lifetime, economic activity does not lead to lock-in effects for CO2 -intensive assets.
  • The economic activity has significant positive environmental impacts based on life cycle considerations.

Transition activities

Transition activities are economic activities that support the transition to a climate-neutral economy and can thus also make a significant contribution to the environmental goal of climate protection. The following conditions must be met for an economic activity to be classified as a transition activity:

  • There is no technologically and economically feasible low-carbon alternative for this economic activity.
  • The economic activity supports the transition to a carbon-neutral economy in line with the path towards limiting the temperature increase to 1.5°C above pre-industrial levels (including through the phase-out of greenhouse gas emissions, in particular from solid fossil fuels).
  • Economic activity has GHG emission levels that are consistent with the best performance of the sector.
  • The activity does not hinder the development and deployment of low-carbon alternatives.
  • The activity does not lead to lock-in effects on CO2-intensive assets, given their economic lifetime.

Enabling activities and transition activities are only taxonomy-eligible if they are taxonomy-compliant.

No, or few taxonomy-compliant economic activities = non-sustainable enterprise?

No, this can definitely not be said because currently only economic activities that possibly make a significant contribution to environmental goals 1 and 2 can be classified as taxonomy-eligible.

Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at or by mobile phone at +49 173 8710322.

Happy accounting and stay sustainable,


Carsten Ernst
Managing Partner
Wirtschafts Treuhand Group
Stuttgart, Germany
– Expert in financial (IFRS) and sustainability (ESRS and GRI) reporting

– Audit of financial and sustainability reports in accordance with ISAs

– Member of the following AGN bodies:
– EMEA Board of Directors (Chairman)
– EMEA AAEC Accounting, Auditing and Education Committee (Member)