Evaluation of potential simplification mechanisms for SMEs to demonstrate EU taxonomy-alignment : final report

The study "Evaluation of potential simplification mechanisms for SMEs to demonstrate EU Taxonomy alignment" was commissioned by the European Commission, DG FISMA, to support the work of the Platform for Sustainable Finance, on data and usability. Based on this report, the subgroup aims to provide evidence-based assessment of the relevance, usability and possible simplifications of evidencing EU Taxonomy technical screening criteria for SMEs in relation to the Climate Delegated Act. The following sectors were identified as containing the most impacted SMEs by the EU Taxonomy: construction; transport; professional, scientific, and technical activities; manufacturing; and electricity supplies. These sectors were identified through 4 impact channels: - Direct relevance - High capital intensity SMEs - Indirect impact through supply chains - SMEs under the scope of the proposed CSRD Subsequently, within those sectors, 32 economic activities were analysed in depth to identify and analyse the challenges that SMEs might face with regards to the TSC. The report elaborates both on cross-sector and sector-specific challenges and provides potential solutions. Identified challenges were classified under three main categories (understanding, meeting and reporting) and include eligibility understanding (related to NACE codes and the role of SMEs in supply chains), cross-referencing with other EU legislation, wording, and resource availability.