On the Commission delegated regulation of 4 July 2025 amending Commission Delegated Regulation (EU) 2021/2178 as regards the simplification of the content and presentation of information to be disclosed concerning environmentally sustainable activities and Commission Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486 as regards simplification of certain technical screening criteria for determining whether economic activities cause no significant harm to environmental objectives

B100566/2025

European Parliament resolution on the Commission delegated regulation of 4 July 2025 amending Commission Delegated Regulation (EU) 2021/2178 as regards the simplification of the content and presentation of information to be disclosed concerning environmentally sustainable activities and Commission Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486 as regards simplification of certain technical screening criteria for determining whether economic activities cause no significant harm to environmental objectives

(C(2025)04568 - 2025/2806(DEA))

– having regard to the Commission delegated regulation of 4 July 2025 amending Commission Delegated Regulation (EU) 2021/2178 as regards the simplification of the content and presentation of information to be disclosed concerning environmentally sustainable activities and Commission Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486 as regards simplification of certain technical screening criteria for determining whether economic activities cause no significant harm to environmental objectives (C(2025)04568),

– having regard to Article 290 of the Treaty on the Functioning of the European Union,

– having regard to Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, and in particular Article 8(4), Article 10(3), Article 11(3), Article 12(2), Article 13(2), Article 14(2), Article 15(2) and Article 23(6) thereof,

– having regard to Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC,

– having regard to Directive (EU) 2013/34 of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC,

– having regard to the EU Platform on Sustainable Finance report ‘Simplifying the EU Taxonomy to Foster Sustainable Finance’ of February 2025,

– having regard to Rule 114(3) of its Rules of Procedure,

‘Do no significant harm’ principle

A. whereas Regulation (EU) 2020/852 establishes the criteria for determining whether an economic activity qualifies as environmentally sustainable for the purposes of establishing the degree to which an investment is environmentally sustainable;

B. whereas, pursuant to Article 3 of Regulation (EU) 2020/852, an economic activity is to qualify as environmentally sustainable if it meets four cumulative conditions, including the requirement that it does not significantly harm any of the environmental objectives referred to in Article 9 of that Regulation, in accordance with the criteria set out in Article 17 thereof;

C. whereas, pursuant to Articles 55 and 57 of Regulation (EC) No 1907/2006, substances of very high concern (SVHCs) comprise substances that meet the criteria for classification as carcinogenic, mutagenic or toxic for reproduction in category 1A or 1B (CMR), substances that are persistent, bioaccumulative and toxic, substances that are very persistent and very bioaccumulative, as well as substances of equivalent level of concern, including endocrine disruptors;

D. whereas Commission Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486 currently encompass all SVHCs, the use of which is prohibited in order to ensure compliance with the ‘do no significant harm’ (DNSH) principle relating to pollution prevention and control across economic activities qualifying as environmentally sustainable under Regulation (EU) 2020/852;

E. whereas, in accordance with the Commission delegated regulation, the application of the DNSH principle in relation to pollution prevention would be limited to SVHCs included in the candidate list referred to in Regulation (EC) No 1907/2006 (493 substances); whereas such an approach would exclude CMRs with harmonised classification (847 substances) and self-classified CMRs (3 042 substances), thus narrowing the scope from 4 382 substances currently covered to only 493;

F. whereas SVHCs are considered as such by virtue of their intrinsic hazardous properties;

G. whereas narrowing the scope of SVHCs covered under the taxonomy provided for under Regulation (EU) 2020/852, by referring to partial lists established for other regulatory purposes, disregards the inherent hazards of such substances;

H. whereas such an approach runs counter to scientific evidence, dilutes the DNSH principle to a very great extent, amounts to greenwashing, and defeats the very purpose of the taxonomy provided for under Regulation (EU) 2020/852, by allowing investment into the very large majority of substances known to be of very high concern to qualify as sustainable investment;

Materiality threshold

I. whereas Article 8 of Regulation (EU) 2020/852 requires financial and non-financial undertakings within the scope of Directive (EU) 2013/34 to disclose the proportion of their turnover, capital expenditure and operating expenditure associated with economic activities that qualify as environmentally sustainable under Articles 3 and 9 of Regulation (EU) 2020/852; whereas the Commission shall adopt delegated acts to specify the content and presentation of the information to be disclosed, including the methodology to be used;

J. whereas the Commission delegated regulation allows non-financial and financial undertakings to exclude from the taxonomy assessment activities deemed not financially material, with non-materiality presumed if their cumulative value is below 10 % of the key performance indicator denominators;

K. whereas such a limitation would substantially restrict the scope of the obligations laid down in Article 8(1) of Regulation (EU) 2020/852, which requires undertakings to disclose how and to what extent their activities are associated with environmentally sustainable economic activities, without any qualification by reference to materiality; whereas, furthermore, such a restriction should not be laid down in a delegated act, which is merely meant to supplement the main act;

L. whereas this derogation has given rise to divergent and often contradictory interpretations among market participants, creating legal uncertainty;

M. whereas materiality thresholds may result in major polluters not reporting at all where their taxonomy-eligible activities fall below the applicable threshold; whereas they may also allow undertakings to determine at their own discretion which activities are to be considered material, thereby enabling the deliberate exclusion of harmful activities and artificially inflating their final taxonomy-alignment results;

N. whereas such outcomes would constitute a significant form of greenwashing and fundamentally weaken the credibility and intended purpose of the taxonomy, provided for under Regulation (EU) 2020/852 as a reliable reporting framework and anti-greenwashing and comparison tool;

O. whereas the measure introduces additional uncertainty and inconsistency and, rather than achieving simplification, in effect fosters increased complexity;

P. whereas the EU Platform on Sustainable Finance has warned against the cumulative effect of the restricted scope of entities subject to taxonomy reporting following the amendments to Directive (EU) 2013/34, in combination with the introduction of materiality thresholds, which together risk dramatically reducing the number of undertakings reporting their taxonomy eligibility and alignment, thereby undermining the capacity of the taxonomy framework to effectively steer sustainable investments;

Financial undertakings

Q. whereas the Commission delegated regulation would provide for the possibility, until 31 December 2027, for financial undertakings currently under the taxonomy scope not to disclose the detailed templates provided in the Commission Delegated Regulation (EU) 2021/2178 but to publish a statement in their management report indicating that they do not claim that their activities are associated with economic activities that qualify as environmentally sustainable under Regulation (EU) 2020/852;

R. whereas such an approach effectively neutralises, for a period of two years, the obligation of financial undertakings to disclose the relevant information; whereas this goes well beyond merely specifying the content and presentation of that information thereby exceeding the limits of the empowerment conferred upon the Commission;

S. whereas the Commission delegated regulation should adopt a symmetric approach to the green asset ratio (GAR), excluding exposures to entities not subject to Directive (EU) 2022/2464 of the European Parliament and of the Council from the GAR denominator only if they are not included in the numerator, since the opposite approach would artificially and unjustifiably inflate banks’ GARs, giving a misleading impression of greener balance sheets;

T. whereas the Commission delegated regulation expressly mentions exposures to local governments among those to be included in the calculation of the GAR denominator;

U. whereas local and regional governments are not subject to Directive (EU) 2022/2464 and therefore are under no legal obligation to disclose sustainability information in accordance with Article 8 of Regulation (EU) 2020/852;

V. whereas local and regional governments, according to their dimension, often lack the financial and human resources to classify their activities or provide the documentation necessary to demonstrate taxonomy alignment, given their public service mandate and limited administrative capacity;

W. whereas exposures to local governments should be included in the calculation of the GAR denominator only where those exposures are also included in the numerator, based on voluntary disclosure by the local governments;

Partial taxonomy alignment

X. whereas the Commission delegated regulation introduces the concept of ‘partial taxonomy alignment’ in line with ‘the aim to scale up transition finance’;

Y. whereas ‘partial taxonomy alignment’ might, with the right safeguards, be a useful concept to report on and enhance transparency of transition finance, whereas however in the Commission delegated regulation the scope and the concept of ‘partial taxonomy alignment’ remains undefined; whereas undertakings should not be permitted to selectively report compliance with certain DNSH technical screening criteria while disregarding others for the same activity, as such ‘cherry-picking’ practices, would further undermine the integrity and credibility of the taxonomy framework;

1. Objects to the Commission delegated regulation;

2. Instructs its President to forward this resolution to the Commission and to notify it that the delegated regulation cannot enter into force;

3. Instructs its President to forward this resolution to the Council and to the governments and parliaments of the Member States.