Learning to Navigate the Criteria
The delegated acts are dense legal documents. This lesson walks through how to actually read them for a specific activity, so you can do it yourself for any sector.
Walkthrough: Building Renovation (Activity 7.2, Annex I)
Let's say your company renovates commercial buildings and wants to know if the activity is taxonomy-aligned for climate mitigation.
Step 1: Find the Activity
Open the Climate Delegated Act Annex I (mitigation). Go to Section 7: Construction and real estate activities. Find Activity 7.2: "Renovation of existing buildings."
Step 2: Read the Description
The activity covers construction and civil engineering works for building renovation as defined in national building regulations. This tells you the scope - it's about the renovation itself, not the building's ongoing operation.
Step 3: Check Substantial Contribution Criteria
For building renovation, the substantial contribution threshold is:
The building renovation achieves at least a 30% reduction in primary energy demand.
That's the number you need to hit. If the renovation reduces energy demand by 25%, it doesn't qualify - regardless of how good everything else looks.
Step 4: Check DNSH for Each Objective
For this activity, the DNSH criteria include:
| Objective | DNSH Requirement |
|---|---|
| Adaptation | Climate risk assessment per Appendix A |
| Water | Water-efficient fixtures: wash basin taps max 6 L/min, showers max 8 L/min, WCs max 6 L full flush |
| Circular economy | At least 70% of construction and demolition waste must be prepared for reuse or recycling |
| Pollution | Building materials must not contain asbestos or substances of very high concern (SVHC) |
| Biodiversity | N/A for this activity |
Step 5: Verify Minimum Safeguards
Check at the company level: human rights due diligence, anti-corruption, labour standards (see Lesson 1.4).
Step 6: Conclude
If all checks pass, the renovation activity is taxonomy-aligned for climate mitigation. Its associated turnover, CapEx, and OpEx can be reported in the aligned KPIs.
Practical tip: The EU Taxonomy Compass (ec.europa.eu/sustainable-finance-taxonomy) is a searchable, visual tool that lets you look up any activity and see its criteria without reading through the full delegated act text. Use it as your first stop.
Quick reference - the assessment flow for any activity:
- Is the activity listed in a delegated act? (Eligible?)
- Does it meet the substantial contribution threshold? (The number)
- Does it pass all DNSH criteria? (The other five objectives)
- Does the company meet minimum safeguards? (Human rights, anti-corruption)
- If yes to all four, it's taxonomy-aligned. Calculate KPIs.
Key Takeaways
- 1Each activity in the delegated acts has a description, substantial contribution criteria (the threshold), and DNSH criteria for all other objectives
- 2For building renovation, the key threshold is a 30% reduction in primary energy demand - below that, the activity is not aligned
- 3The EU Taxonomy Compass is a free, searchable tool that makes navigating the criteria much easier than reading the raw delegated act text
- 4The assessment always follows the same five-step flow: eligible, substantial contribution, DNSH, minimum safeguards, then calculate KPIs