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How are the EU Taxonomy, SFDR and CSRD linked?

Clare avatar
Written by Clare
Updated over 2 months ago

Under the Omnibus Simplification Package, changes aim to make the application of the taxonomy more practical and less burdensome, particularly for companies and investors. The main proposed changes to the EU Taxonomy include adjustment of thresholds of companies obliged to report for EU taxonomy as well as simplified reporting requirements.


These changes are currently under review by the European Parliament and council.

The EU Taxonomy provides a classification system (for economic activities), which is applied within CSRD. In other words, reporting on the EU Taxonomy will be done as part of CSRD reporting.

The EU sustainable finance framework includes the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the Sustainable Finance Disclosure Regulation (SFDR). These three regulations are closely interrelated and work together to support directing investments toward taxonomy-aligned activities, by enabling investors to identify these activities:

  • The EU Taxonomy provides a classification system for sustainable economic activities that is applied within the CSRD and SFDR.

  • The CSRD is relevant for the SFDR, as it provides part of the information to be disclosed for the SFDR report.

  • Companies affected by the SFDR, in turn, need the EU Taxonomy metrics from the CSRD report of their investment objects to fulfil their reporting obligations.

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