The Three Numbers That Matter
Non-financial companies report three KPIs. Each one tells a different part of the story.
Turnover KPI
What it measures: What proportion of the company's revenue comes from taxonomy-aligned activities.
Formula:
Turnover KPI
Turnover KPI
Percentage of aligned turnover
Aligned Turnover
Net revenue from taxonomy-aligned products and services
Total Turnover
Total net turnover as defined in financial statements
What it tells you: How green the company's current business is. A high turnover KPI means most of the company's products and services already meet the taxonomy bar.
CapEx KPI
What it measures: What proportion of the company's capital expenditure relates to taxonomy-aligned assets or plans to become aligned.
This is the forward-looking KPI. It captures not just current alignment but transition investment. A fossil fuel company building a wind farm would show this in CapEx even if its turnover is entirely non-aligned.
Three types of CapEx qualify for the numerator:
- CapEx related to assets or processes already taxonomy-aligned
- CapEx that is part of a plan to expand taxonomy-aligned activities
- CapEx to upgrade activities to become taxonomy-aligned (CapEx plans)
The CapEx KPI is where the taxonomy recognises transition. A company with 5% aligned turnover but 40% aligned CapEx is clearly investing to change. Investors look at this gap to assess transition credibility.
OpEx KPI
What it measures: The proportion of relevant operating expenditure related to taxonomy-aligned activities.
"Relevant operating expenditure" has a narrow definition: direct non-capitalised costs for R&D, building renovation, short-term leases, maintenance, and repair related to the assets and processes covered by the taxonomy.
Many companies find their OpEx KPI denominator is small because it only covers specific cost categories, not all operating expenses. If the denominator is immaterial, companies can set the OpEx numerator to zero - but they must still disclose the total OpEx denominator value and explain why it is immaterial.
Technical Details from the Disclosures Delegated Act
A few details that matter when calculating the KPIs:
- CapEx denominator for IFRS companies includes additions to IAS 16 (property, plant, equipment), IAS 38 (intangible assets), and IFRS 16 (right-of-use assets from leases). Leases that don't create a right-of-use asset are excluded.
- CapEx plans can include investment to convert eligible activities to aligned ones. But if the plan fails its conditions, previously published KPIs must be restated - this is a real consequence.
- R&D costs already captured in the CapEx KPI cannot be double-counted in the OpEx KPI.
- Adaptation-only revenue from activities meeting only the adaptation criteria (Art. 11(1)(a)) is excluded from the turnover numerator unless the activity has dual-objective benefits.
Worked Example
GreenBuild Construction Co.
Total net turnover: EUR 200 million
- Revenue from taxonomy-aligned building renovation: EUR 60 million
- Revenue from non-eligible activities (consulting, project management): EUR 140 million
Turnover KPI: 60 / 200 = 30%
Total CapEx: EUR 50 million
- New energy-efficient equipment for renovation projects: EUR 20 million
- Investment in a new prefab factory (CapEx plan to reach alignment within 5 years): EUR 15 million
- Non-eligible CapEx (office fit-out, IT): EUR 15 million
CapEx KPI: (20 + 15) / 50 = 70%
The company's current business is 30% aligned, but 70% of its investment is going into taxonomy-aligned or transitioning activities. The CapEx KPI tells the transition story.
Key Takeaways
- 1Three KPIs: Turnover (how green is the current business), CapEx (how green is the investment), and OpEx (how green is the operational spending)
- 2The CapEx KPI is the most important for transition - it captures investment in becoming aligned, not just current alignment
- 3OpEx has a narrow definition covering only R&D, renovation, short-term leases, and maintenance - many companies find the denominator immaterial
- 4A company with low turnover alignment but high CapEx alignment signals credible transition investment