Does your portfolio pass the taxonomy conformity check?
The regulatory requirements for financial and credit institutions are constantly growing. Since the beginning of 2022, banks have been required to report on the taxonomy compliance of their portfolio. From 01/01/2024, the reporting obligation on taxonomy compliance will follow. The aim of these EU-wide regulations is to evaluate the sustainability of transactions according to uniform standards – and thus to create trust and comparability for all financial market participants.The data collected in this process can be used to calculate the taxonomy disclosure, the so-called Green Asset Ratio.
The EU Taxonomy Regulation thus obliges banks to check transactions for their sustainability and thus to promote the transformation to an environmentally friendly European economy. But: The implementation of the EU taxonomy regulations means a considerable additional effort for financial and credit institutions and presents them with numerous challenges:
- Data availability: Due to the novelty of the EU Taxonomy Regulation, there is partly no comprehensive access to the taxonomy KPIs of all counterparties.
- Data processing: The complexity and level of detail of the criteria make it difficult to implement the taxonomy review in a cost-efficient manner.
- Regulatory: The scope of interpretation of the regulations is not clearly defined by industry standards and changes over time.
Align yourself with regulatory requirements – with the EU taxonomy software from PwC
To help you meet the demands of a taxonomy assessment, PwC has developed a taxonomy tool. Taxonomy Classification helps you understand the impact of the EU taxonomy on your own business and simplifies the calculation of the Green Asset Ratio for reporting. The tool-based taxonomy compliance solution allows you to capture all relevant data in a complete and simple way right from the start. Using a structured checklist from Taxonomy Classification, you can check whether the economic activities that you finance contribute to climate protection or affect the achievement of other EU environmental targets. The checklist procedure enables financial institutions to carry out the reams of regulatory documents precisely for your loan under review. Various logics in the background of the tool and simplified text modules contribute to an uncomplicated and targeted taxonomy compliance check. With the help of Taxonomy Classification, you can easily find out how aligned with the applicable EU taxonomy regulation and thus how sustainable your portfolio is.
The advantages of PwC’s Taxonomy software
Future-proof solution for your bank's sustainability reporting:
Our comprehensive front-to-end solution provides you with a continuously usable data warehouse for all taxonomy data.
Cost savings and reduced resource requirements:
The fast track solutions of Taxonomy Classification minimise the data entry effort in the loan origination process, simplify and shorten the review process and thus reduce the burden on your resources.
No need to deal with long, unclear regulations:
PwC's Taxonomy Classification translates complex regulatory requirements simply into specially developed checklists.
Legal and audit-proof:
Our taxonomy tool is characterised by continuous further development and adaptation to current regulatory requirements.
Comprehensive ESG expertise from PwC:
The EU taxonomy reporting software incorporates the extensive experience of our PwC experts in taxonomy assessments.
Current technological standards with an intuitive user interface:
Thanks to OCR and AI as well as our long-standing partnership with Microsoft, our cloud-based tool is always up to date. The PwC taxonomy check can also be expanded to include other modern cloud technologies.
- Use of the taxonomy tool independent of the number of users
- User manual (based on tooltip function)
- First level support for technical questions (email support)
- Maintenance and further development of the tool along regulatory requirements
- Adaptations for the environmental objectives 1 to 6 according to the EU Taxonomy Regulation
- Update of the user interface and associated database (incl. user manual)
Get in touch
Please provide your company email address if you would like to receive more information, an offer or a demo of this product. Our experts Frank Waggershauser, Daniel Wildhirt and Sven Karl Mosenheuer will contact you as soon as possible.
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What is a Fast Track?
By using modern technology such as our Taxonomy Classification software, it is possible to automate a reduction in manual document review on the system side. Corresponding documents are read out via OCR, which means that the taxonomy alignment check can be automated, simplified and shortened in time.
How can I integrate the tool into my system landscape?
Taxonomy Classification is suitable for full integration into the inventory systems and the connection to reporting as well as a stand-alone solution with manual interfaces.
How is the data on physical climate risks connected?
Our tool offers the possibility to connect to external data providers. Taxonomy Classification provides empty data fields for this purpose, which are aligned with the respective requirements of the data on physical risks.
How are the taxonomy KPIs linked?
Similar to the physical climate risks, the taxonomy KPIs are also linked. Our EU taxonomy reporting software provides empty data fields that are aligned with the respective requirements of the taxonomy data. This makes it possible to integrate your external data providers for taxonomy KPIsinto PwC’staxonomy tool.
How did PwC develop the checklists included in the taxonomy tool?
The checklists are compiled by PwC experts based on the regulatory requirements of the taxonomy. In multiple review phases, our experts reduced the complex documents and annexes to essential test and action instructions in order to ensure stringent processing of the conformity test.