Assessing the gap - EU taxonomy eligibility and alignment in the European chemical industries

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School of Business | Master's thesis

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Date

2025-05-21

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Major/Subject

Mcode

Degree programme

Master's Programme in Creative Sustainability

Language

en

Pages

82

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Abstract

This thesis investigates how the EU Taxonomy can support the objectives of green finance, by examining the gap between eligibility and alignment in the Taxonomy disclosures of European chemical industry companies. The EU Taxonomy is designed to guide capital flows toward environmentally sustainable activities by classifying operations as eligible if they are listed in the technical appendices of the Taxonomy legislation, and aligned if they meet the required criteria. However, concerns have been raised regarding its complexity, applicability, and implementation in practice. The study analyses data from 22 chemical European industry companies that reported EU Taxonomy Key Performance Indicators (KPIs) for the years 2022– 2024. The three KPIs, turnover, capital expenditure (CapEx), and operational expenditure (OpEx), were retrieved from annual reports to assess the levels of eligibility, alignment, and the gap between them. Additionally, narrative disclosures were reviewed to identify common challenges and company-level differences. Companies were categorized into three groups based on their sustainability performance, to allow for additional comparisons. The findings reveal a substantial gap between eligibility and alignment across all KPIs, throughout the three-year period. While some companies demonstrate integration of sustainability practices, most report only eligibility figures, with alignment often unassessed or unmet due to technical or strategic constraints. It is concluded that although the EU Taxonomy has increased reporting transparency, it is yet to fully deliver on its transformative potential. This thesis contributes to the discussion around sustainable finance by offering insights into implementation challenges of the EU Taxonomy, also highlighting areas where both regulatory reform and corporate strategy could be used to close the alignment gap and support a more inclusive green transition.

Description

Supervisor

Lankoski, Leena

Keywords

sustainability, sustainable development, EU taxonomy, green finance, EU regulations, chemical industry

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Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202506114569

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[gradu] Kauppakorkeakoulu / BIZ