In-depth assessment of the implementability of the DNSH criteria in the EU

The consultancy supported the European Commission in assessing the practical implementability of the Do No Significant Harm (DNSH) criteria established under the EU Taxonomy Regulation. The objective was to strengthen the effectiveness, consistency and usability of the EU sustainable finance framework by evaluating how DNSH requirements can be applied, verified and audited across Taxonomy-eligible economic activities and environmental objectives.

The work included a comprehensive review and assessment of DNSH criteria, combining regulatory analysis, literature review, stakeholder consultations, surveys and interviews with companies, financial institutions, auditors, public authorities and taxonomy practitioners. A key component of the study was the evaluation of DNSH criteria against a set of implementation dimensions, including the clarity and interpretability of requirements, the availability and accessibility of information needed to demonstrate compliance, the administrative burden associated with implementation, the auditability and verifiability of compliance, and the applicability of criteria to activities and value chains located outside the European Union.

Based on the findings, the consultancy identified implementation barriers, inconsistencies and practical limitations affecting the application of DNSH criteria across sectors. The project also analysed best practices and approaches adopted in other sustainable finance frameworks and developed evidence-based recommendations to improve the transparency, coherence and effectiveness of DNSH requirements. The results supported the European Commission in refining the EU Taxonomy framework and strengthening its role as a robust classification system for environmentally sustainable economic activities.