The EU Taxonomy and the Energy Supply Sector - A qualitative case study on the implications of the EU Taxonomy on the regulatory reporting requirements in the energy supply sector

Abstract: The EU Taxonomy provides a clear set of criteria for identifying sustainable economic activities and facilitating investment flows in alignment with sustainable practices. Although dynamic, the Taxonomy emphasizes the mitigation of greenhouse gas emissions and biodiversity conservation, making it crucial for companies, policymakers, and capital markets. To meet the EU's environmental goals, a significant transition from fossil fuels to renewable energy sources is required, which highlights the central role of the energy supply sector in the transition to a sustainable economy. This research uses a qualitative case study approach to examine the impact of the Taxonomy on the regulatory reporting requirements for companies in the energy supply sector. The regulatory changes and the experience of a company in the industry, namely the German energy supplier EnBW, are analyzed regarding implementing the requirements of the EU Taxonomy. This research finds a gap between the intended and actual implementation of the Taxonomy. It identifies that the classification of transitional economic activities, interpretation issues, and time constraints contribute to this disparity. The results of this study identify the strengths and potential weaknesses of the Regulation, and suggestions for the future improvement of the Taxonomy are outlined.