The EU Taxonomy is a cornerstone regulation for sustainable finance, designed to guide capital towards genuinely environmentally sustainable activities. But what is the purpose of the taxonomy? Simply put — it defines what counts as sustainable in the EU, creating a common language for businesses, investors, and policymakers.

Key purposes of the EU Taxonomy:

• Clarity and consistency — Ensures that companies and investors are aligned when evaluating sustainability.
• Combats greenwashing — Prevents vague or misleading environmental claims.
• Supports EU climate goals — Directs investments to activities that help meet climate neutrality targets.
• Improves comparability — Helps stakeholders assess how sustainable a company or activity really is.
• Transparency in reporting — Enables businesses to disclose in a structured and reliable way.

Why is this relevant to companies?

Companies falling under the Non-Financial Reporting Directive (NFRD) or Corporate Sustainability Reporting Directive (CSRD) must disclose their alignment with the EU Taxonomy. This applies to both large corporations and financial market participants.

Businesses must classify their activities using specific criteria and report how much of their revenue, CapEx, and OpEx is Taxonomy-eligible and Taxonomy-aligned.

To help companies navigate this complex requirement, our team at CLF offers an innovative solution — Taxonomy-aligned modular containers.

CLF Containers: A real-world example of taxonomy alignment

CLF Containers are designed to meet Taxonomy technical screening criteria. Made with low-carbon materials and built using resource-efficient methods, they are ideal for construction companies and real estate developers looking to align with the EU Taxonomy.

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• Full specification
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Using these containers in projects can make it easier to report Taxonomy alignment, especially in areas like:

• Sustainable construction
• Circular economy principles
• Pollution prevention

How does the taxonomy benefit business?

It’s not just compliance. Companies aligned with the EU Taxonomy may benefit from:

• Easier access to green finance
• Better stakeholder trust
• Stronger ESG scores
• Competitive advantage in sustainable tenders

In summary

What is the purpose of the EU Taxonomy? The EU Taxonomy aims to define environmentally sustainable economic activities to support investment decisions, ensure reporting transparency, and prevent greenwashing.

With solutions like CLF Containers, businesses can confidently meet these requirements and lead the transition to a carbon-less future.