The EU Taxonomy Regulation sets out a classification system that translates the European Union’s environmental objectives into criteria for determining when an activity can be considered environmentally sustainable for investment purposes. Within the current Taxonomy, we’ve voluntarily identified that some of our activities are environmentally sustainable taxonomy-aligned activities. These are predominantly our recycling operations.
As a UK company with its registered office and headquarters in London, DS Smith plc is not currently subject to the Taxonomy Regulation on a mandatory basis. However, we welcome measures to increase transparency and seek to comply with the Taxonomy on a voluntary basis.
Taxonomy-eligible activities 2022/23
- c. 4 per cent of turnover
- c. 14 per cent of capital expenditure
- c. 3 per cent of operating expenditure
- c. 3 per cent of turnover
- c. 1 per cent of capital expenditure
- c. 1 per cent of operating expenditure was taxonomy-aligned.
Given that our industry and primary economic activity currently falls outside the scope of the economic activities defined by the EU Taxonomy, as the delegated acts continue to be developed and brought forward by the European Commission, we expect that more of our economic activities will be classified as environmentally sustainable.
Our complete EU Taxonomy 2022/23 report, as referenced in our voluntary disclosure on pages 64-65 of DS Smith Annual Report 2023, introduces the EU Taxonomy, the EU Taxonomy-eligible and aligned activities identified and sets out turnover, capital expenditure and operating expenditure tables. There is further discussion of how we have applied Do No Significant Harm (DNSH) and minimum safeguards criteria, in addition to the accounting principles applied.
We continue to monitor the development of this emerging legislation and we will look to evolve our disclosure accordingly.