Last July, we wrote about changes coming to the EU’s Taxonomy regulation. These include a materiality threshold for reporting entities and a reduction in the number of data points required in disclosures. Now those changes are official, as the Commission’s Delegated Act simplifying the EU Taxonomy has been published in the Official Journal of the EU. Companies subject to taxonomy reporting will be given the option to comply with the new rules this year or report under the previous rules for one more year. A recent Linklaters memo provides details:
“The Delegated Act will enter into force on 28 January 2026 and start applying retrospectively from 1 January 2026 covering the 2025 financial year for companies already in scope of the EU Taxonomy regime. However, companies have an option to defer for one year and apply the previous regime for the 2025 financial year if more convenient, although it must apply those reporting rules in full.
Reporting undertakings should include a statement in the contextual information of their sustainability report that specifies which set of reporting rules they applied when reporting on the 2025 financial year.”
These changes are much anticipated as the EU Taxonomy has had a challenging implementation since its debut in 2020. There has been confusion around how the Taxonomy rules apply and questions about their effectiveness. The recent changes are designed to simplify the law and make compliance easier for in-scope entities.
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