Adama Bayo-Moulinet, Advisory Senior Manager, kShuttle

Financial solution to climate change?


Green taxonomy, a new challenge for finance departments?

If in companies, the CSR Department has often had a preserve on the issue, finance is now in high demand.

The taxonomy goes in this direction. It is the desire to say that finance must also focus on environmental problems through precise, standard indicators and criteria accepted by all.

The taxonomy is, thus, a classification system set up by the European Union, economic activities having a favorable impact on the environment. Its objective is the reorientation of financial flows and is based for this on 6 objectives with eligibility and alignment criteria established by a group of experts. These elements are specified in the European Taxonomy Regulation EU 2020/852, Annexes and Delegated Acts for 2 of the 6 objectives; the other 4 being expected for 2023. To date, for companies declaring the DPEF, the first deadline on the eligibility and alignment criteria is 2023 relating to the results of 2022. For the others, it will be from 2024 on the results of 2023. All sectors of activity are concerned and both financial and non-financial activities.

For the moment, no one can affirm that the Taxonomy will make it possible to do it effectively but it works in this direction.

How to implement Taxonomy in business?

Once this observation has been made. The next question is: how do we organize ourselves concretely? Regarding non-financial companies, publishing 3 KPIs – turnover, CAPEX and green OPEX – may seem simple; for companies new to the subject and even large groups, it is legitimate to wonder how to integrate this into existing reporting and IS. Should we acquire a new tool, work with Excel or stay with existing tools?
The challenge for the company is to recover data from systems that may be different, compile it, reprocess it and interpret it.
This according to, for the moment, 2 objectives, 13 sectors and a hundred activities for each entity. Imagine the number of combinations required and the possible risk of error…
It is therefore important to have a scalable tool, capable of managing a large volume and adapting to changes in regulations while archiving the data in order to be able to compare them.
Another possibility consists of redefining an analytical breakdown of the indicators. But knowing that time is running out, it is first necessary to collect the data and carry out this work in a facilitating tool while waiting for the titanic and meticulous work on the accounts. This tool must be able to be integrated into the existing IS environment and allow the Taxonomy report to be produced quickly.
Beyond this operational objective, it is necessary to see further and in the way of other financial indicators to be able to establish a trajectory, develop a forecast and monitor developments with several versions and auditability in real time. Which is not easy in an Excel-type spreadsheet. We are clearly approaching EPM solutions little by little.

Taxonomy Insight the proposal of KShuttle to accompany you

Based on this analysis, KShuttle worked on the Taxonomy Insight solution which combines all the advantages of augmented EPM while being scalable in the face of unfixed regulations.
Thus Taxonomy Insight will make it easier for you to follow regulations, step by step support for users, follow-up of what has been achieved, forecasting with a workflow, a GED (to justify) and dashboards and graphs. But also ultimately, a taxonomy report compliant with regulations with the possibility of exporting to publication tools (Disclosure)

Adama Bayo-Moulinet, Advisory Senior Manager, kShuttle


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