The EU Taxonomy on sustainable investments
To achieve its objectives of the EU Climate Energy targets of 2030 and the European Green Deal, the European commission implemented the EU taxonomy.
This taxonomy allows companies to benefit from a common language on sustainability – and more specifically CO2 emissions – and a clear definition on how to fit these criteria. Hence, together with this regulation comes the obligation by financial institutions to comply to certain thresholds when is comes to carbon emissions of their clients.
This new regulation comes with a pile of obstacles both for companies and financial Institutions. Companies are faced with conducting evaluations, when there is actually no past or actual data available.
The Global Challenge On the Road to Carbon Neutrality
Lack of reliable data
Companies often, especially small and medium sized, do not have enough data to provide accurate sustainability assessments and carbon footprint monitoring
Lack of transparency
Existing assessments and rating providers fail to provide explainable, auditable and transparent results.
What is the TAXO TOOL?
The TAXO TOOL, AI-software for implementing the EU Taxonomy for sustainable investments, has been jointly developed by DYDON AI in partnership with Bundesverband Öffentlicher Banken Deutschlands (VÖB), and its subsidiary VÖB-Service GmbH.
With the TAXO TOOL, the complexity of the technical evaluation criteria of the EU taxonomy for sustainability are mapped in one system and automated processes are made possible. In this way, processes can be automated and costs can be significantly reduced.
Certain financing projects or financial products can thus be analyzed and evaluated for compliance with the EU taxonomy. The integration of physical and procedural fundamentals provides an efficient solution, even when it comes to project financing, individual projects or small companies that are not subject to NFRD reporting (e.g. municipal utilities). Process engineering models are used, which also enable an evaluation if basic data are not completely available.
The solution explicitly addresses banks and savings banks that are interested in a market standard for implementing the taxonomy, but is also open to other institutions that fall within the scope of Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on establishing a framework to facilitate sustainable investments (taxonomy).
The EU taxonomy is a new regulatory mammoth project with enormous implications and high bureaucratic costs. The scope of the Best Available Techniques (BAT) and the legislation documents in the EU taxonomy regulation alone adds up to a total of 30,000 printed pages at an average of 300 pages per document. In addition, a large number of publicly available data sources must be used to calculate CO2 emissions and energy values.
The ready-to-go AI platform supports data collection and document capture. This means that there is no need for institution-specific development. This reduces costs significantly and increases efficiency. Thanks to this application, financing projects or financial products can be analyzed and evaluated as compliant with the EU Taxonomy.
The uniqueness of this software is that it has a strong knowledge base. It has its own CO2 emission database consisting of procedural models, which also enable an assessment if basic data are not fully available, that is often the case for SME.
Transparency and auditability of the results are also key elements in Dydon AI Suite.
Join our free webinar and product demo
The TAXO TOOL has successfully gone into operation after a one-year development period.
It helps you to assess whether your financing projects and financial products are compliant with the EU taxonomy.
The current public discussion on the classification of nuclear and gas-fired power plants as “sustainable according to the Taxonomy Regulation” shows that the regulatory process is far from complete and will also provide you with further work packages in the coming years.
For us, the go-live of TAXO TOOL is the starting point for the next development steps.
Join us, get informed on the EU Taxonomy and discover how our TAXO TOOL works.
When is the next online webinar and demo taking place?
- Thursday 16th March 2023 at 14.00-15.00 CEST
- Tuesday 21st March 2023 at 14.00-15.00 CEST
- Friday 24th March 2023 at 10.00-11.00 CEST
We help business and institutions making sustainable financial decisions
We’re proud to say that our AI Suite is an “open-box” system. The results that we share with our customers are transparent, traceable and fully auditable, supporting the company in its decision-making process and allowing real change.
Discover more about our TAXO TOOL