EU Taxonomy
Common definitions
The EU Taxonomy regulation (EU) 2020/852 is a new regulation within the European union (EU) and serves as a classification system to determine whether an economic activity is to be considered environmentally sustainable. The regulation was established to contribute to the fulfillment of the targets within the European Green Deal by shifting investments in the financial markets towards environmentally sustainable activities. Through common definitions and criteria for which economic activities can be assessed as environmentally sustainable, it becomes easier for investors to make sustainable investments as the transparency of activitiesʼ environmental impact increases. In this way, environmentally sustainable activities will attract investors which also creates incentives for companies to become more environmentally-friendly.
BE Group is covered by the Non-Financial Reporting Directive (NFRD) and is thus subject to the reporting requirements from the EU Taxonomy. In order to comply with the regulation, a company must report, based on three financial goals, the extent to which the company’s economic activities correspond to the Taxonomy-eligible economic activities (eligibility), as well as the extent to which the parts of the Taxonomy-eligible company’s operations also meet the regulations so called Technical Screening Criteria (TSC) and Minimum safeguards (aligned). Those parts of the company’s operations that meet the criteria are classified according to the Taxonomy as environmentally sustainable for the current financial year.
The EU Taxonomy covers a total of six environmental objectives that are subject to an assessment: Climate change mitigation, Climate change adaption, Sustainable use of water and marine resources, Circular economy, Pollution prevention and Healthy ecosystems. For an economic activity to be classified as environmentally sustainable, the activity needs to contribute significantly to at least one of the environmental objectives, not cause significant damage to any of the other environmental objectives and comply with the minimum safeguards relating to social sustainability.
For the taxonomy report of the fiscal year 2023 it is, according to the Article 8 of the Taxonomy Regulation (EU) 2020/852, the associated Delegated regulation (EU) 2021/2178 of 6 July 2021 as well as the associated Delegated regulation (EU) 2023/3851 of 7 June 2023, a requirement to report eligibility and alignment for the first two objectives and eligibility with the other four remaining objectives.
For analysis of economic activities linked to the TSC, the Delegated regulation (EU) 2021/2139 of 4 June 2021 and the associated Delegated regulation (EU) 2023/3851 of 7 June 2023 has been used. KPI´s used is Turnover, Capital expenditure (CAPEX) and Operating expenditure (OPEX).
Eligibility assessment
BE Group is an independent steel distributor that buys materials from the steel mills and sells them on to customers with some processing in the form of production services, such as cutting, sawing, blasting and painting. BE Group has no impact in the production of the materials and does not sell finished products. BE Group has reviewed the operations based on the EU Taxonomy and has not identified any applicable sales linked to its criteriaʼs at present.
As a steel distributor, the main economic activities are not bound by any TSC and are therefore not covered by the EU Taxonomy for now. The EU Taxonomy focuses on sectors with the highest possibility to contribute to the Sustainable Development Goals (SDG), which means that the regulation does not currently include BE Groups main operation, something that might however change in the near future. This leads to reduced disclosure requirements this year but with the awareness that the regulation will expand over more businesses and activities in the future.
To gather information and report in accordance with the EU Taxonomy, an internal working group was put together consisting of the CFO, Group Accountant and Finance Managers in Sweden and Finland. Together with external consultants the working group mapped the business and its activities for the analysis with guidance from the Delegated regulations and associations which, using NACE Codes (EU classification of Economic Activities), describe the taxonomy´s activities and specify Technical Screening Criterias that must be met in order to be evaluated as aligned with the Taxonomy. Below activities were deemed eligible:
- Transport by motorbikes, passenger cars and light commercial vehicles (6.5)
- Installation, maintenance and repair of energy efficient equipment (7.3)
- Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) (7.4)
- Aquisition and ownership of buildings (7.7)
All of the activities above relates to the environmental objective Climate change mitigation. However, BE Group has evaluated all activities related to the environmental objectives and whether any of its activities are linked to BE Group’s operations.
Derivation of figures
Turnover
The analysis from the working group concludes that the Groupʼs Turnover cannot be connected to any activity within the scope of the TSC. This means that 0% of the turnover is covered during the financial year 2023, which is the same figure as for the financial year 2022. The Groupʼs total Turnover can be found in the Income Statement on the row net sales. However, activities with connected TSC were identified for OPEX and CAPEX.
OPEX
The working group has identified and reviewed applicable activities based on the companies OPEX during the financial year. OPEX includes renovation measures, short-term leasing, maintenance and repair as well as other direct expenses related to the ongoing management of assets and which are necessary to ensure the continued and efficient functioning of the assets. OPEX is included in note 2 on row External costs.
From the description of activity 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings), it appears that installation of charging stations is included in the activity. During 2023, BE Group has had OPEX linked to the installation of charging stations which are therefore deemed to be costs covered by the Taxonomy. OPEX resulting from the installation of the charging stations during the year has been compiled and divided with total OPEX for the group amounting to SEK 56 M. OPEX for activity 7.4 amounts to SEK 1 M in 2023 (1.2% of total OPEX).
The working group’s assessment is that the activity also meets the criteria for a significant contribution to limiting climate change, which are: 7.4 Installation, maintenance or repair of charging stations for electric vehicles. However, the working group has not carried out a climate risk and vulnerability analysis for the activity in line with Appendix A to the Delegated Regulation (EU) 2021/2139. The installation of charging posts is therefore not considered to be aligned with the Taxonomy. This means that 1.2% of BE Group’s OPEX is covered by the Taxonomy in the financial year 2023, which can be compared to 0% in 2022. Furthermore, 0% of BE Group’s OPEX is aligned with the Taxonomy in the financial year 2023. The corresponding figure from 2022 is 0%.
The Group currently owns a building that was acquired in 2022 and the building is relevant for activity 7.7 Acquisition and ownership of buildings. The OPEX linked to the building is 0% of the Group´s total OPEX, which is why the activity is not deemed essential to include as a taxonomy activity.
CAPEX
CAPEX related to assets applicable in the taxonomy can be divided into different activities. The working group has identified and reviewed applicable activities based on the CAPEX that occurred during the fiscal year. According to Annex 1 in the Delegated regulation CAPEX for the financial year ended December 31, 2023 is calculated as follows:, Taxonomy-eligible CAPEX divided by total CAPEX. Total CAPEX for BE Group is thus the sum of the acquisitions reported in note 13– Other intangible assets and note 14 – Tangible assets (Acquisitions), note 14 – Tangible assets (Acquisitions of subsidiaries – Building) and note 15 Right of use assets (additional rights of use) in accordance with IFRS 16 which can be found in the Annual Report.
Activity 6.5 – Transport by motorbikes, passenger cars and light commercial vehicles include leasing of vehicles designated as passenger vehicles. BE Group is leasing right-of-use automotive assets (leased cars) and therefore includes the activity as the numerator in the reporting for eligible activities. The leased cars used within the Group have been checked whether they are fulfilling the requirements to be aligned with the taxonomy or not. No cars acquired during the year are aligned with the taxonomy since the requirements from the first two objectives with reference to the TSC have not been fulfilled. Currently, mainly diesel cars are leased within BE Group, which means that the criteria from the TSC are not met.
CAPEX derived from the leased cars added during the year has been summarized and put in relation to the total CAPEX for the Group and is included in the reporting for intangible, tangible and right-of-use assets, see note 13, 14 and 15 in the Annual report. The CAPEX for activity 6.5 amounts to SEK 3 M 2023 (2% of total CAPEX), SEK 2 M 2022 (3% of the total CAPEX) and to SEK 2 M 2021 (5% of the total CAPEX).
Activity 7.3 – Installation, maintenance and repair of energy efficient equipment, described as individual renovation measures that include installation, maintenance and repair of energy efficient equipment. During the year, BE Group invested in the installation of LED lighting in all of the company’s warehouses in Finland and these investments are deemed to be covered by the above activity in the Taxonomy. CAPEX for the installation of LED lighting in 2023 amounts to SEK 5 M in 2023 (3% of total CAPEX). The working group has not been able to determine that the installation of LED lighting meets the applicable TSC and the activity is therefore not aligned with the Taxonomy.
In summary, the above means that 5% of BE Group’s CAPEX is covered by the Taxonomy in the financial year 2023, which can be compared to 8% in 2022. Furthermore 0% of BE Group’s CAPEX is deemed to be compatible with the Taxonomy in the financial year 2023. The corresponding figure from 2022 is 0%.
CAPEX regarding investments in automatic control valves connected to district heating systems for reduced energy consumption has been subject to assessment. However, the working group has not been able to establish that the installation of such valves is referred to with activity 7.3, which is why the installations have not been included in this year’s Taxonomy report. It is possible that the assessment may change in future years as further guidance on interpretations becomes available and practice being prepared.
The activity 6.6 – Freight transport services by road have also been subject to assessment but with a conclusion that the activity is non-eligible. The vehicles used for this purpose cannot be connected to the TSC since the group does not own, finance, leases, rent or have any operations connected to the vehicles used for the purpose since it is a matter of a purchased service regarding delivery from suppliers. Thus, the responsibility of the vehicles is held by suppliers. Read more about how BE Group handles transports in the sustainability report.
Since the activities above are few and clearly separated in our reporting there is no risk for double counting, which has been ensured throughout the conducted analysis.
The activities covered by the taxonomy are presented in the tables for OPEX and CAPEX, neither of which are aligned with the taxonomy regulation. BE Group has no eligible economic activities for turnover, which is presented in the tables.
| Financial year 2023 | Year | Substantial contribution criteria | |||||||
| Economic Activities | Code | Turnover | Proportion of Turnover year 2023 | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity |
| | SEK M | % | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | |
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||
| Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | – | – | – | – | – | – | – | |
| Of which enabling | – | – | – | – | – | – | – | – | |
| Of which transitional | – | – | – | ||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||
| EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||
| Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | – | – | – | – | – | – | – | – | |
| A. Turnover of Taxonomy-eligible activities (A.1 + A.2) | – | – | – | – | – | – | – | – | |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||
| Turnover of Taxonomy-non-eligible activities | 5,328 | 100% | |||||||
| Total | 5,328 | 100% | |||||||
| DNSH criteria | |||||||||
| Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy-aligned (A.1) or -eligible (A.2) Turnover, year N-1 | Category (Enabling activity) | Category (Transitional activity) |
| Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T |
| – | – | – | – | – | – | – | – | ||
| – | – | – | – | – | – | – | 0% | E | |
| – | – | – | – | – | – | – | 0% | T | |
| | |||||||||
| – | |||||||||
| – | |||||||||
Table for Turnover used from Annex II in the Delegated regulation (EU) 2023/2486.
| Financial year 2023 | Year | Substantial contribution criteria | |||||||
| Economic activities | Code | CapEx | Proportion of CapEx | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity |
| | MSEK | % | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | |
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||
| CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | – | – | – | – | – | – | – | |
| Of which enabling | – | – | – | – | – | – | – | ||
| Of which transitional | – | – | – | ||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||
| EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||
| A.2 Transport by motorbikes, passenger cars & light commercial vehicles | CCM 6.5 | 3 | 2% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |
| A.2 Installation, maintenance and repair of energy efficiency equipment | CCM 7.3 | 5 | 3% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |
| A.2 Aquisition and ownership of building | CCM 7.7 | 0 | 0% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |
| CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 8 | 5% | 5% | – | – | – | – | – | |
| CapEx of Taxonomy-eligible activities (A.1 + A.2) | 8 | 5% | 5% | – | – | – | – | – | |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||
| CapEx of Taxonomynon-eligible activities | 149 | 95% | |||||||
| Total | 157 | 100% | |||||||
| DNSH criteria | |||||||||
| Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy-aligned (A.1) or -eligible (A.2) CapEx, year 2022 | Category (Enabling activity) | Category (Transitional activity) |
| J/N | J/N | J/N | J/N | J/N | J/N | J/N | % | E | T |
| – | – | – | – | – | – | – | – | ||
| – | – | – | – | – | – | – | 0% | E | |
| – | – | – | – | – | – | – | 0% | T | |
| | |||||||||
| 0% | |||||||||
| 0% | |||||||||
| 0% | |||||||||
| – | |||||||||
| – | |||||||||
Table for CAPEX used from Annex II in the Delegated regulation (EU) 2023/2486.
| Financial year 2023 | Year | Substantial contribution criteria | |||||||
| Economic Activities | Code | OpEx | Proportion of OpEx, year 2023 | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity |
| | MSEK | % | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | |
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||
| OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | 0% | – | – | – | – | – | – | |
| Of which enabling | – | 0% | – | – | – | – | – | – | |
| Of which transitional | – | 0% | – | ||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||
| EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||
| A.2 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) | CCM 7.4 | 1 | 1% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |
| OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 1 | 1% | 1% | – | – | – | – | – | |
| A. OpEx of Taxonomy-eligible activities (A.1 + A.2) | 1 | 1% | 1% | – | – | – | – | – | |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||
| OpEx of Taxonomynon-eligible activities | 55 | 99% | |||||||
| Total | 56 | 100% | |||||||
| DNSH criteria | |||||||||
| Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy-aligned (A.1) or -eligible (A.2) OpEx, year N-1 | Category (Enabling activity) | Category (Transitional activity) |
| J/N | J/N | J/N | J/N | J/N | J/N | J/N | % | E | T |
| – | – | – | – | – | – | – | – | ||
| – | – | – | – | – | – | – | 0% | E | |
| – | – | – | – | – | – | – | 0% | T | |
| | |||||||||
| 0% | |||||||||
| – | |||||||||
| 0% | |||||||||
Table for OPEX used from Annex II in the Delegated regulation (EU) 2023/2486.
Nuclear energy and fossil gas related activities
The working group has also analyzed the delegated act for nuclear energy and fossil gas, the supplementary delegating regulation (EU) 2022/1214, and the Group currently has no activity linked to this business. See table below for additional information:
| Nuclear energy related activities | ||
| 1. | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. | NO |
| 2. | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. | NO |
| 3. | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | NO |
| Fossil gas related activities | ||
| 4. | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | NO |
| 5. | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. | NO |
| 6. | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. | NO |