The Autorité des marchés financiers (AMF), France’s stock market regulator, published a second educational report on taxonomy reporting by listed companies. Following a first analysis of listed companies' reporting on the taxonomy published in November 2022, the AMF is publishing a second report this year analyzing the quality of the information provided by 31 non-financial companies on the eligibility and alignment of their activities with the European taxonomy.
The Taxonomy Regulation is a European system for classifying economic activities to identify those considered to be environmentally sustainable. The Regulation and its delegated acts establish an evolving list of "eligible" activities, i.e., those likely to contribute to environmental objectives and define criteria for assessing the sustainability of each one of them. An activity is sustainable (and therefore “aligned” with the European Taxonomy) if it meets three conditions: it contributes to at least one of the six European environmental objectives, it does not harm any of the other objectives, and it respects minimum social and societal safeguards. Companies that publish non-financial statements must communicate their level of eligibility and, since 2023 for non-financial companies, the level of sustainability of their activities according to the taxonomy.
As part of its study, the AMF analyzed the taxonomy information of a sample group of 31 listed non-financial companies of various sizes and sectors. Overall, the companies surveyed have continued their efforts undertaken since 1 January 2022: the vast majority have published the various indicators requested, together with contextual information. However, the explanations and figures published appear to be heterogeneous and difficult to compare from one issuer to another.
Non-financial companies reported for the first time in 2023 on the extent to which their economic activities are taxonomy-aligned with the two climate change mitigation and adaptation objectives. The report highlights the following key findings in this area: Almost all companies have limited themselves to analyzing the contribution of their activities to the climate change mitigation objective and have not given sufficient consideration to the climate change adaptation objective. The AMF stresses the importance of analyzing the contributions to the different objectives of the taxonomy in order to fully respect the regulations; Several companies have chosen not to disclose the extent to which some of their activities are aligned due to legal uncertainties; Few companies have identified sustainable investment plans, although this information is important for reporting on their transition efforts; and Almost a third of the companies surveyed reported alternative indicators on a voluntary basis. This is an option if it is not given more prominence than the regulatory information, at the risk of misleading readers. Also, the taxonomy has recently been extended to include four new environmental objectives that will have to be considered for the next reports in 2024.
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