Taxonomy Regulation

Information pursuant to Article 8 of the EU Taxonomy Regulation (2020/852)and the Commission Delegated Regulation (EU) 2021/2178

It is a key aim of the EU to make the European economy more climate-friendly by reducing CO₂ emissions in the future. The funding of sustainable investments and projects will be implemented as part of the action plan for financing sustainable growth (“EU Action Plan on Sustainable Finance”).

The EU Taxonomy is a standardised and legally binding classification system for sustainable economic activities. Energie AG Group annually evaluates which activities should be classified as Taxonomy-eligible and which as Taxonomy-aligned on the basis of the delegated acts published on all six environmental objectives.

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

Defining Taxonomy-eligible economic activities

The first step was for Energie AG to identify economic activities that take place in the Energie AG Group and are listed in the delegated act. This took place in several workshops with the help of the “EU Taxonomy Navigator”. The NACE codes (Nomenclature of Economic Activities) listed in the description of the economic activities were also taken into account.

Assessing the Taxonomy alignment of economic activities

In the second step, the Taxonomy-eligible economic activities identified for the Energie AG Group were evaluated to determine whether they made a material contribution to one of the following six environmental objectives:

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

An assessment was then carried out to determine whether practising these economic activities adversely affects any of the other five environmental objectives (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.

Technical evaluation criteria (material contribution and DNSH criteria)

The assessment and documentation of the corresponding data on the material contribution of the associated environmental objectives and the review to confirm avoidance of significant harm to the other five environmental objectives (DNSH) were performed by nominated technical experts from the relevant Group entities.

Only those economic activities that make a material contribution to at least one of the six EU environmental objectives listed above (material contribution) and which furthermore do no significant harm to the other environmental objectives (DNSH) may be classified as Taxonomy-aligned. These activities may only be classified as Taxonomy-aligned if they fully satisfy all criteria.

Climate risk and vulnerability assessments

To prevent major impairments to the environmental objective “Climate change adaptation” (DNSH 2), all economic activities considered Taxonomy-aligned that contribute significantly to climate change mitigation must satisfy the requirements in Appendix A of Annex I of the Delegated Regulation (EU) 2021/2139. These provisions require a climate risk and vulnerability assessment to identify major climatic influences on the respective activity.

It was first identified whether there were any potential climate risks that could impair the effectiveness of the respective economic activity. Where relevant, adaptation solutions were set down as actions to reduce physical climate risks. The climate risk and vulnerability assessments were carried out using a standardised assessment sheet and are updated annually.

Minimum safeguards

Energie AG ensures observance of the social minimum safeguards under Article 18 of the EU Taxonomy Regulation through the application of management processes established across the Group as well as organisational regulations (partly through codes of conduct and Group policies).

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

These guidelines and processes and their observance essentially constitute the required due diligence checks. Moreover, it is also a condition for positive fulfilment of the minimum safeguards that there are no significant violations of social standards.

In addition to the aforementioned guidelines and codes of conduct, the Group-wide whistleblowing system 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. A concept for software-based supplier monitoring has also been developed in Energie AG Group.

No violations of social standards were identified in Energie AG Group in the past 2023/2024 fiscal year.

Economic activities in Energie AG Group identified as Taxonomy-eligible within the meaning of the EU Taxonomy Regulation with regard to the environmental objective Climate change mitigation (CCM) include:

Economic activity CCM 4.3. Electricity generated 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.

In the current 2023/2024 fiscal year, four new environmental objectives must now be reported in addition to the environmental objectives already reported in the past. The impact analysis also identified for Energie AG Group the following economic activities to be reported under the environmental objectives Transition to a circular economy (CE) and Pollution prevention and control (PPC):

Certain economic activities carried out in Energie AG Group may however be Taxonomy-eligible for several environmental objectives, i.e. they are outlined in several provisions or should be assigned to several environmental objectives. Combating climate change is a major focus for Energie AG Group and so all economic activities that can be attributed to several environmental objectives have been assigned to the environmental objective Climate change mitigation.

KPIs for turnover, CapEx and OpEx in the 2023/2024 fiscal year

Turnover – definition

Pursuant to the EU Taxonomy Regulation, sustainable turnover corresponds to the proportion of net turnover that is generated exclusively by Energie AG Group itself and is associated with Taxonomy-aligned economic activities (numerator), divided by the total net turnover (denominator) in the Group. The consolidated net turnover is defined according to the International Accounting Standard (IAS) 1.82(a) – see Notes to the Consolidated Financial Statements, Consolidated Statement of Income.

The largest proportion of Taxonomy-aligned turnover derives from the economic activity CCM 4.5. Electricity generated from hydroelectric power (Energy Segment), and from economic activity CCM 4.9., Transmission and distribution of electricity (Grid Segment). In the Waste Management Segment, the largest proportion of Taxonomy-aligned turnover derives from the economic activity CCM 5.5., Collection of non-hazardous waste. In the Czech Republic Segment, however, the economic activities operation of water supply and waste water treatment systems (CCM 5.1. and CCM 5.3.) deliver a material contribution to sustainability.

The proportion of Taxonomy-aligned economic activities in net turnover is 32.2% (previous year: 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.

Turnover

Investment expenditure (CapEx) – definition

The CapEx key figure corresponds in the numerator to the proportion of Taxonomy-aligned additions to property, plant and equipment and intangible assets that are associated with Taxonomy-aligned economic activities which are part of a plan to increase Taxonomy-aligned economic activities or to convert a Taxonomy-eligible economic activity to a Taxonomy-aligned economic activity (“CapEx plan”) as well as Taxonomy-aligned single investments. The total capital expenses of the Group are shown in the denominator – see Group Management Report, Business Development in the Group.

The proportion of Taxonomy-aligned economic activities in investments (CapEx) is 83.7% (previous year: 71.7%). The largest proportion of Taxonomy-aligned CapEx derives from the economic activity CCM 4.9., Transmission and distribution of electricity (Grid Segment), followed by economic activity CCM 4.10., Storage of electricity, and CCM 4.5., Electricity generated from hydroelectric power (Energy Segment).

Investment expenditure (CapEx)

A CapEx plan for the next five years was created in accordance with Delegated Regulation (EU) 2021/2178, Annex I, Point 1.1.2.2. The CapEx plan includes two large-scale sustainable projects that are already being implemented and are aimed at expanding Taxonomy-aligned activities in the Group.

Operating expenses (OpEx) – definition

The OpEx key figure corresponds in the numerator to the proportion of Taxonomy-aligned operating expenses that are associated with Taxonomy-aligned economic activities which are part of a plan to expand Taxonomy-aligned economic activities or to convert a Taxonomy-eligible economic activity to a Taxonomy-aligned economic activity (OpEx plan) as well as Taxonomy-aligned operating expenses for individual actions. The total operating expenses of the Group as defined in the EU Taxonomy Regulation are shown in the 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 46.6% (previous year: 40.5%). The largest proportion of Taxonomy-aligned OpEx derives from the economic activity CCM 4.9., Transmission and distribution of electricity (Grid Segment), followed by CCM 4.5., Electricity generated from hydroelectric power, (Energy Segment) and CCM 5.5., Collection and transportation of non-hazardous waste (Waste Management Segment).

Operating expenses (OpEx)

Outcome of the Taxonomy assessment

In the reporting year, the proportion of Taxonomy-aligned net turnover increased by 9.4% compared to the previous year. This was mainly due to a decrease in Taxonomy non-eligible turnover from electricity and gas trading. Meanwhile, turnover from the new economic activities belonging to the environmental objectives to be reported on for the first time this year was reported as aligned. While electricity generated from hydroelectric power (CCM 4.5) is above the previous year’s value due to a good water level, the drop in volumes in the electricity grid (CCM 4.9. Transmission and distribution of electricity) has a negative effect on the proportion of Taxonomy-aligned turnover.

The proportion of Taxonomy-aligned CapEx has increased significantly by 12.0% in the reporting period compared to the previous year. To a large extent, this is the result of investment in the pumped-storage power plant Ebensee (CCM 4.10. Storage of electricity) as well as the expansion of the electricity grid (CCM 4.9. Transmission and distribution of electricity).

The proportion of Taxonomy-aligned OpEx has increased by 6.1% in the reporting period compared to the previous year. This increase was mainly attributable to increased operating expenses within the electricity grid (CCM 4.9. Transmission and distribution of electricity) and the implementation of energy efficiency measures in buildings belonging to the Energie AG Group (CCM 7.3. Installation, maintenance and repair of energy efficiency equipment).

The following tables offer a detailed overview of the Taxonomy alignment of individual Taxonomy-eligible economic activities within the Energie AG Group:

Taxonomy information