The Taxonomy Regulation is a classification system from the EU that defines when an economic activity can be classified as being environmentally sustainable. The EU Taxonomy has six environmental objectives:

• Climate change mitigation
• Climate change adaptation
• Sustainable use and protection of water and marine resources
• Transition to a circular economy
• Pollution prevention and control
• Protection and restoration of biodiversity and ecosystems 

For each environmental objective, a number of requirements have been established that activities must meet to be classified as environmentally sustainable. An activity must contribute substantially to at least one environmental objective and cause no significant harm to the other objectives. In addition, the company carrying out the activity must comply with a number of minimum guarantees with respect to human rights, bribery and corruption, taxation and fair competition. 

To date, the EU has set requirements for activities that fall within the scope of the first two environmental objectives, so our investments in the green transition are calculated solely in accordance with these two objectives. Once requirements and classified activities in relation to the remaining four environmental objectives have been defined by the Taxonomy, these will be included in the calculation of our investments in the green transition.

The activities that are classified as environmentally sustainable differ from sector to sector.

At present, the Taxonomy classifies activities that fall within the scope of the first two objectives. Such activities include: 

• electricity generation from solar, wind, hydro or geothermal energy
• production/distribution of district heating and electric heat pumps
• reduction of greenhouse gas emissions through the application of data-driven solutions
• planting of new forest areas and climate-efficient production facilities
• production of electric vehicles or solutions to reduce the climate impact of transport infrastructure
• energy renovation and energy-efficiency improvement of buildings
• reuse of biowaste and wastewater

In our calculation of our investments in the green transition, we only include EU Taxonomy data that has been reported directly by companies or other investment assets. Currently, there is limited data coverage relating to the proportion of company activities and other investment assets that can be categorised as environmentally sustainable in alignment with the EU Taxonomy.

Because the Taxonomy and associated data will develop over the coming years, we expect that our investments in the green transition will increase. In future, for example, the Taxonomy will cover more activities and more environmental objectives. In addition to this, we expect to be able to access an increasing amount of and better-quality data as more companies and other investment assets increase their EU Taxonomy-related reporting.

Yes, our investments in the green transition are subject to a limited assurance audit carried out annually by an external audit firm in connection with our annual reporting. The practice of limited assurance auditing is widespread in the area of sustainability because ESG data is in general subject to a certain level of uncertainty.