Testing the Application of the EU Taxonomy to Core Banking Products: High Level Recommendations

As 26 banks tested the EU Taxonomy on over 40 transactions across a diverse scope of sectors, economic activities, banking products, corporate structures and geographical regions, BNP Paribas, Caixabank and Credit Suisse provided insight into their degree of alignment concerning mortgage products specifically and the real sector generally. BNP Paribas’ analysis of eligibility criteria and thresholds indicated:

  • New Construction (after December 2020): there is currently no national definition of NZEB across all EU countries.
  • Renovation: the 30% reduction in primary energy demand should be compared with the energy performance before renovation and proved by an Energy Performance Certificate. There is no centralised data source for the EPCs existing in the EU countries.
  • New Construction: (before December 2020): local or national information on EPCs and the “top 15 %” is not available; “The TEG recognises that more work needs to be done to collect and analyse data in order to define absolute thresholds corresponding to the performance of the top 15% of each local stock, such as data showing the distribution of EPCs across the stock and the thresholds used to define EPC ratings.”

Additional case studies were published which assess the complexities of the EU Taxonomy as they relate to particular financial institutions. The thresholds for Substantial Contribution and Do No Significant Harm Criteria (DNSH) were recognized as granular by the industry with known gaps between such thresholds and industry practice.

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