SME disclosure on taxonomy alignment : cost/benefit analysis : final report; Volume 2

This Study provides evidence on the potential costs and benefits for European micro, small and medium-sized enterprises (SMEs) that voluntarily report their alignment with the EU Taxonomy, a regulatory and navigational tool that provides a unified and broad classification system for sustainable economic activities. The results of the Study are based on quantitative data analysis, stakeholder interviews, an SME survey, and a documentary review of the available sources. The Study analyses the Taxonomy reporting process, with a review of the main cost activities and their drivers, and estimates the potential costs incurred by SMEs for reporting. These costs are compared with the potential benefits of Taxonomy reporting, especially with regard to access to sustainable finance, under different scenarios. On this basis, the Study provides recommendations on how to simplify the reporting process and make it less burdensome for SMEs as well as indications on possible revision of the Green Asset Ratio of banks and large financial institutions.