EU Taxonomy

The redirection of capital streams into sustainable investments is one of the EU's main objectives of the action plan for financing sustainable growth (“EU Action Plan on Sustainable Finance”). The EU Taxonomy Regulation came into effect in the middle of 2020 and serves as a uniform binding classification system that defines the economic activities in the EU that are deemed “environmentally sustainable”. The companies report on the outcomes of this classification on an annual basis. Accordingly, the non-financial reports of the companies include information on how and to what extent their activities are to be classified as environmentally sustainable.

Information pursuant to Article 8 of the EU Taxonomy Regulation (2020/852)

Based on the published delegated acts and regulations, Energie AG assessed which of the Group’s activities can be classified as environmentally sustainable economic activities (Taxonomy-eligible) and subsequently reviewed their Taxonomy alignment.

Energie AG established Taxonomy alignment through an interdisciplinary project. Legal, commercial and technical experts from the Controlling, Human Resources, Purchasing, Occupational Health and Safety, Works Council and Compliance Management units were all involved in the process.

The first step was to identify economic activities of relevance to the Energie AG Group and listed in the delegated act of the EU Taxonomy Regulation (Taxonomy-eligible activities). In the second step, the Taxonomy-eligible economic activities were evaluated to determine whether they made a substantial contribution to the environmental goal of “climate change mitigation” (technical evaluation criteria). An assessment was then carried out to determine whether practising these economic activities adversely affects any of the other five environmental goals (DNSH – do no significant harm). Finally, compliance with minimum safeguards was reviewed at Group level. When these steps had been evaluated positively, the relevant economic activities were declared Taxonomy-aligned.

To avoid double counting when assigning economic activities, those activities classified as Taxonomy-aligned were exclusively allocated to the environmental goal of “climate change mitigation” in accordance with the technical evaluation.

Technical evaluation criteria and DNSH criteria

The assessment and documentation of technical criteria for the environmental goal of “climate change mitigation” and the review to confirm avoidance of significant harm to the other five environmental goals (DNSH) were performed by nominated technical experts from the relevant Group entities.

Only those economic activities that make a substantial contribution to at least one of the six EU environmental goals listed below (technical evaluation criteria) and which furthermore do no significant harm to the other environmental targets (DNSH) may be classified as Taxonomy-aligned.

1. Climate change mitigation
2. Climate change adaptation
3. Sustainable use and protection of water and marine resources
4. Transition to a circular economy, waste prevention and recycling
5. Pollution prevention and control
6. Protection and restoration of biodiversity and ecosystems

Minimum safeguards

Energie AG ensures observance of the social minimum safeguards under Article 18 of the EU Taxonomy Regulation and thus compliance with the requirements of the social affairs and governance areas through the application of management processes established across the Group as well as organisational regulations (partly through codes of conduct and Group guidelines).

In line with the published guidelines and codes of conduct, Energie AG undertakes to comply with, among other things:

• human rights and labour rights
• rules on compliance and combating corruption
• fair competition
• applicable tax provisions

In addition to the aforementioned guidelines and codes of conduct, the Group-wide whistleblowing system (“Tell-me”) and the new Diversity, Equity & Inclusion (DEI) initiative play major roles in the Group’s compliance with these obligations.

In addition, Energie AG’s “Code of Conduct for Contractors” requires the Group’s suppliers and business partners to adhere to the principles above.

Economic activities identified within the meaning of the EU Taxonomy Regulation

The economic activity “electricity generation from wind power” is not included in Energie AG's disclosures under the EU Taxonomy Regulation because the wind power-related participating interests within Energie AG Group are not consolidated or only consolidated using the equity method.

KPIs for turnover, capex and opex in the 2022/2023 fiscal year

Turnover – definition

In line with the EU Taxonomy Regulation, only goods and services rendered by the Energie AG Group itself are taken into account when calculating sustainable turnover. The proportion of sustainable economic activities in total sales was calculated as the share of turnover with goods and services associated with sustainable economic activity (numerator) divided by the Energie AG Group’s consolidated net turnover according to the International Accounting Standard (IAS) 1.82(a) (denominator), see Notes to the Consolidated Financial Statements, Consolidated Statement of Income.

The largest proportion of Taxonomy-aligned turnover derives from the economic activity of electricity generation from hydroelectric power (Energy Segment) and from the transmission and distribution of electricity (Grid Segment). Alongside a range of other listed economic activities, the collection of non-hazardous waste (Waste Management Segment) and the operation of water and waste water treatment systems (Czech Republic Segment) deliver major contributions to sustainability for the Energie AG Group.

The proportion of Taxonomy-aligned economic activities in net turnover is 22.8%, significantly lower than in the capex and opex key figures. This is largely due to the fact that net turnover from trading and sales of electricity and gas are not considered under the EU Taxonomy Regulation.

Investment expenditure (capex) - definition

The capex key figure indicates the proportion of investment expenditure either linked to a sustainable economic activity or relating to the procurement of products and services from sustainable economic activity.

The capex key figure is defined as sustainable investment expenditure (numerator) divided by total investment expenditure on intangible assets, property, plant and equipment and IFRS 16 leasing investment (denominator), see Group Management Report, Business development in the Group.

The proportion of Taxonomy-aligned economic activities in investments (capex) is 71.7%. The largest proportion of Taxonomy-aligned capex derives from the economic activity of transmission and distribution of electricity (Grid Segment), followed by electricity generation from hydroelectric power (Energy Segment). Taxonomy-aligned investments include proportionate preliminary project costs for the pumped-storage power plant in Ebensee as approved by the Supervisory Board. Construction on the biggest single investment in the history of the Group started in October 2023.

Operating expenses (opex) - definition

The opex key figure expresses the proportion of operating expenses within the meaning of the EU Taxonomy Regulation that is associated with sustainable economic activity or the procurement of products from sustainable economic activity. The opex key figure is defined as sustainable operating expenses (numerator) divided by the total defined operating expenses (denominator).

Operating expenses essentially comprise expenditure in connection with ongoing maintenance, servicing and repair of intangible assets and property, plant and equipment. Expenditure on research and development (R&D) and expenditure on short-term leases can also be recognised as operating expenses.

The proportion of Taxonomy-aligned economic activities in operating expenses (opex) is 40.5%. The largest proportion of Taxonomy-aligned opex derives from the economic activity of transmission and distribution of electricity (Grid Segment), followed by electricity generation from hydroelectric power (Energy Segment) and the collection and transportation of non-hazardous waste (Waste Management Segment).

Taxonomy information