EU Taxonomy
Common definitions
The EU Taxonomy Regulation (EU) 2020/852 is a regulation that 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 activities’ environmental impact increases. In this way, environmentally sustainable activities will attract investors which also creates incentives for companies to become more environmentally friendly.
The EU Taxonomy covers a total of six environmental objectives: climate change mitigation, climate change adaption, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.
BE Group is subject to the reporting requirements of the Taxonomy under Article 8 of the Regulation. Therefore, information must be provided on how and to what extent the company’s activities are covered by the Taxonomy (taxonomy-eligible) and how well they meet the technical screening criteria to be considered environmentally sustainable (taxonomy-alignment).
Disclosures must be made based on three financial key figures to clarify the proportion of the company’s products, services, assets, or processes covered by the Taxonomy. For an economic activity or part of an activity to be aligned with the Taxonomy, it is required that the activity contributes to one or more of the six environmental objectives by meeting the technical screening criteria, does not cause significant harm to any of the other objectives, and is implemented in accordance with certain minimum safeguards. The parts of the company’s operations that meet these criteria are classified as environmentally sustainable for current financial year.
For the analysis of economic activities in relation to the technical screening criteria, the Commission’s delegated regulation (EU) 2021/2139 of 4 June 2021 has been considered for the first two environmental objectives, while the supplementary delegated regulation (EU) 2023/2486 of 27 June 2023 has been used for the remaining four environmental objectives. Furthermore, the Commission’s delegated regulations (EU) 2022/1214 of 9 March 2022 and (EU) 2023/2485 of 27 June 2023 have also been considered in the analysis of eligible and aligned activities. The key figures applied in this analysis are revenue, capital expenditures (CAPEX), and operational expenditures (OPEX). No changes in the calculation method has been made since last year.
Scope
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 revenues linked to its criteria 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 collect information and report in accordance with the regulation, BE Group has formed an internal working group consisting of the CFO, Group Accountant, and the Finance managers in Sweden and Finland. Together with external consultants, the working group mapped the company’s operations and economic activities, guided by the supplementary delegated regulations and annexes, which, using NACE codes (the European statistical classification of economic activities), describe the Taxonomy’s activities and specify the technical screening criteria that must be met to be assessed as aligned with the EU taxonomy regulation.
Below are the activities that were deemed as taxonomy-eligible:
- Transport by motorbikes, passenger cars and light commercial (6.5)
- Installation, maintenance and repair of energy efficient equipment (7.3)
All of the aforementioned activities fall within the environmental objective “Climate change mitigation.” However, BE Group has conducted a thorough assessment of all activities across the six environmental objectives to evaluate their scope and alignment with BE Group’s operations.
Compared to the previous financial year, Acquisition and ownership of buildings (7.7) is not included as a taxonomy-eligible activity, as no new building has been acquired during the year.
Derivation of figures
Turnover
The analysis from the working group concludes that the Group’s turnover cannot be connected to any taxonomy-eligible activity. This means that 0% of the turnover is derived from taxonomy-eligible products or services for year 2024, which is the same figure as for the financial year 2023. The Group’s total turnover can be found in the Income Statement on page 29 on the row “Net sales”.
OPEX
The working group has identified and reviewed applicable activities based on the OPEX incurred by the company during the financial year. OPEX includes renovation measures, short-term leasing, maintenance and repairs, as well as other direct expenses related to the ongoing management of assets, necessary to ensure the continued and efficient functioning of the assets. OPEX is included in note 3, page 45, under the line “Other external costs.”
No activities have been identified for OPEX, and in summary, 0% of the taxonomy scope is reported, compared to 1% in the previous financial year. The reporting is presented in the tables.
CAPEX
CAPEX related to assets covered by the Taxonomy can be categorized into different activities. The working group has identified and reviewed applicable activities based on the CAPEX made during the financial year. According to Annex 1 of the delegated regulation, CAPEX for the financial year ending 31 December 2024 is calculated as follows: CAPEX covered by the taxonomy divided by total CAPEX. Total investments (CAPEX) for BE Group are thus the sum of the new acquisitions reported in note 14 – Other intangible assets and note 15 – Tangible assets (Acquisitions), note 15 – Tangible assets (Acquisition of business – Buildings and land), and note 16 – Right of use assets (New right-of-use assets) in accordance with IFRS 16, as found in the Annual Report.
Activity 6.5 – Transport by motorcycles, passenger cars, and light motor vehicles, includes leasing of vehicles designated as passenger vehicles. BE Group leases cars that are part of the Group’s right-of-use assets and are assessed to be covered by the above taxonomy activity. Of the Group’s additional leased cars in 2024, 30% are electric vehicles. According to the working group’s assessment, the additional electric vehicles meet the technical screening criteria for this taxonomy activity. However, the working group has not conducted a complete review of the activity in relation to the requirements to avoid causing significant harm or ensuring that the minimum sustainability requirements are met. Therefore, the activity is not considered to fully meet the criteria for a taxonomy-aligned activity.
CAPEX arising from the Group’s additional leased cars during the year has been compiled and divided by total CAPEX for the Group, and is included in the reporting for intangible, tangible, and right-of-use assets, as per notes 14, 15, and 16 in the Annual Report. CAPEX for activity 6.5 amounts to SEK 4.5 million in 2024 (4% of total CAPEX), while the share for the previous year was SEK 3 M (2% of total CAPEX).
Activity 7.3 – Installation, maintenance, and repair of energy-efficient equipment, is described as individual renovation measures that include the installation, maintenance, and repair of energy-efficient equipment. During the year, BE Group has continued its investments in LED lighting in the company’s warehouse facilities, a project that was initiated in 2022. This activity falls within the scope of the taxonomy and is therefore included in the reporting. CAPEX for the installation of LED lighting in 2024 amounted to SEK 1.8 M (1% of total CAPEX). The working group has determined that the installation of LED lighting meets the applicable technical screening criteria. However, an analysis of whether the activity causes no significant harm, as well as ensuring that the minimum sustainability requirements are met, has not been conducted, meaning that alignment with the taxonomy is not considered to be fulfilled for this activity.
In summary, this means that 5% of BE Group’s CAPEX is covered by the Taxonomy for the financial year 2024, maintaining the same coverage as last year. Furthermore, 0% of BE Group’s CAPEX is considered aligned with the taxonomy for the financial year 2024, which is in line with the corresponding figure from 2023.
As the economic activities are few and clearly separated in the reporting, there is no risk of double counting, which has been ensured through the completion of the analysis.
Turnover
| 2024 | Year | Substantial contribution criteria | DNSH criteria | ||||||||||||||||
| Economic Activities | Code | Turnover | Proportion of Turnover year 2024 | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | 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 2023 | Category (Enabling activity) | Category (Transitional activity) |
| 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 | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T | ||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | – | N/EL | N/EL | N/EL | N/EL | N/EL | N/EL | – | – | – | – | – | – | – | – | |||
| Of which enabling | – | – | 0% | E | |||||||||||||||
| Of which transitional | – | – | 0% | T | |||||||||||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | – | – | – | – | – | – | – | – | 0% | ||||||||||
| A. Turnover of Taxonomy-eligible activities (A.1 + A.2) | – | – | – | – | – | – | – | – | 0% | ||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| Turnover of Taxonomy-non-eligible activities | 4,667 | 100% | |||||||||||||||||
| Total | 4,667 | 100% | |||||||||||||||||
CAPEX
| 2024 | Year | Substantial contribution criteria | DNSH criteria | ||||||||||||||||
| Economic Activities | Code | CAPEX | Proportion of CAPEX year 2024 | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | 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 2023 | Category (Enabling activity) | |
| 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 | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| CAPEX of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | – | N/EL | N/EL | N/EL | N/EL | N/EL | N/EL | – | – | – | – | – | – | – | – | |||
| Of which enabling | – | – | 0% | E | |||||||||||||||
| Of which transitional | – | – | 0% | T | |||||||||||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| A.2 Transport by motorbikes, passenger cars & light commercial vehicles | CCM 6.5 | 5 | 4% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 2% | |||||||||
| A.2 Installation, maintenance and repair of energy efficiency equipment | CCM 7.3 | 2 | 1% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 3% | |||||||||
| CAPEX of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | 7 | 5% | 5% | – | – | – | – | – | 5% | ||||||||||
| CAPEX of Taxonomy-eligible activities (A.1 + A.2) | 7 | 5% | 5% | – | – | – | – | – | 5% | ||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| CAPEX of Taxonomy non-eligible activities | 126 | 95% | |||||||||||||||||
| TOTAL | 133 | 100% | |||||||||||||||||
OPEX
| 2024 | Year | Substantial contribution criteria | DNSH criteria | ||||||||||||||||
| Economic Activities | Code | OPEX | Proportion of OPEX year 2024 | Climate change mitigation | Climate change adaption | Water | Pollution | Circular economy | Biodiversity | 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 2023 | Category (Enabling activity) | Category (Transitional activity) |
| 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 | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T | ||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| OPEX of environmentally sustainable activities (Taxonomy-aligned) (A.1) | – | – | N/EL | N/EL | N/EL | N/EL | N/EL | N/EL | – | – | – | – | – | – | – | – | |||
| Of which enabling | – | – | 0% | E | |||||||||||||||
| Of which transitional | – | – | 0% | T | |||||||||||||||
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| OPEX of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | – | – | – | – | – | – | – | – | 1% | ||||||||||
| A. OPEX of Taxonomy-eligible activities (A.1 + A.2) | – | – | – | – | – | – | – | – | 1% | ||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| OPEX of Taxonomynon-eligible activities | 57 | 100% | |||||||||||||||||
| TOTAL | 57 | 100% | |||||||||||||||||
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 |