Procurement Glossary
EU taxonomy: definition, application, and significance in Procurement
November 19, 2025
The EU taxonomy is a classification system used by the European Union to define which economic activities are considered environmentally sustainable. For Procurement , this Procurement a fundamental change in supplier evaluation and purchasing decisions. Read on to find out what the EU taxonomy is, how it is applied in the procurement process, and what strategic implications it has for companies.
Key Facts
- Legally binding EU classification system for sustainable economic activities since 2020
- Six environmental goals: climate protection, climate adaptation, water resources, circular economy, environmental pollution, and biodiversity
- Reporting requirements for large companies from 2022 with direct implications for supplier evaluation
- Three criteria: significant contribution to environmental objectives, no significant adverse impact on other objectives, minimum protection standards
- Covers over 70 economic activities with detailed technical evaluation criteria
Contents
What is EU taxonomy? Definition and process flow
The EU taxonomy is a science-based classification system that defines clear criteria for environmentally sustainable economic activities.
Basic structure and criteria
The system is based on three central requirements for taxonomy-compliant activities:
- Significant contribution to at least one of the six environmental goals
- No significant adverse impact on the other five environmental objectives
- Compliance with minimum social protection standards
EU taxonomy vs. other sustainability standards
Unlike voluntary standards such as GRI standards or Science Based Targets, the EU taxonomy is legally binding. It differs in its binary classification: activities are either taxonomy-compliant or not.
Significance of EU taxonomy in Procurement
For purchasing organizations, the EU taxonomy means the systematic integration of sustainability criteria into procurement processes. This requires new evaluation methods for suppliers and their activities, as well as adapted due diligence processes.
Process steps and responsibilities
The implementation of the EU taxonomy in Procurement structured processes for evaluating and integrating sustainability criteria.
Supplier evaluation according to taxonomy criteria
The first step involves systematically analyzing supplier activities based on taxonomy criteria. This involves evaluating business models, production processes, and environmental impacts.
- Mapping supplier activities to taxonomy categories
- Evaluation of the technical evaluation criteria
- Review of minimum social protection standards
Integration into procurement processes
Taxonomy compliance is integrated as an evaluation criterion in tenders and supplier selection. This requires adapted evaluation matrices and compliance processes.
Data management and reporting
Systematic collection and documentation of taxonomy-relevant data from suppliers for the Corporate Sustainability Reporting Directive. This includes regular data updates and validation of supplier information.
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Key KPIs for EU taxonomy
Measuring taxonomy compliance requires specific metrics for assessing sustainability performance in procurement.
Taxonomy compliance rate
Percentage of suppliers and procurement volume that meet taxonomy criteria. This metric shows progress in the sustainable transformation of the supply chain.
- Percentage of taxonomy-compliant suppliers
- Proportion of purchasing volume from taxonomy-compliant activities
- Development of the conformity rate over time
Environmental target contribution by category
Measurement of contributions to the six EU environmental objectives through supplier activities. This enables a differentiated assessment of sustainability performance and identification of potential for improvement.
Compliance efficiency and assessment quality
Key figures for evaluating the effectiveness of taxonomy implementation, including evaluation time, data quality, and CO2e reduction through taxonomy-compliant procurement.
Risks, dependencies and countermeasures
The implementation of the EU taxonomy in Procurement various operational and strategic risks that must be managed proactively.
Complexity of the evaluation criteria
The technical evaluation criteria of the taxonomy are highly complex and change regularly. This can lead to incorrect evaluations of suppliers and compliance violations.
- Regular training for purchasing teams
- External consulting for complex valuations
- Systematic monitoring of regulatory changes
Supplier dependencies and market narrowing
Strict taxonomy requirements can lead to a narrowing of the supplier market. This increases dependencies and can drive up procurement costs.
Data quality and greenwashing risks
Insufficient or incorrect supplier data jeopardizes taxonomy compliance. ESG risk assessments and robust validation processes are essential for risk minimization.
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Practical example
An automobile manufacturer implements the EU taxonomy in its battery supplier assessment. The company develops a systematic assessment grid that reflects the technical criteria for sustainable battery production. Suppliers must demonstrate that their production processes contribute to at least one environmental objective and do not significantly compromise any other objectives. The assessment covers energy efficiency, recyclability, and social standards in raw material procurement.
- Mapping supplier activities to taxonomy categories
- Assessment based on technical criteria and thresholds
- Integration of taxonomy compliance into supplier selection and contract drafting
Current developments and effects
The EU taxonomy is constantly evolving and increasingly influencing global procurement strategies and supplier relationships.
Expansion of taxonomy areas
The EU plans to extend this to social taxonomy and other economic sectors. This will significantly expand the assessment criteria for suppliers and create new compliance requirements.
Digitalization and AI integration
Artificial intelligence is revolutionizing taxonomy assessment through automated data analysis and risk assessment. AI tools enable the efficient processing of large amounts of data to assess supplier taxonomy compliance.
Global harmonization of standards
International alignment of sustainability standards with the EU taxonomy is influencing global supply chains. This is leading to more uniform assessment criteria, but also requires adjustments in the decarbonization of the supply chain.
Conclusion
The EU taxonomy is transforming the procurement landscape with binding sustainability criteria and science-based assessment standards. It offers purchasing organizations a structured framework for sustainable supplier evaluation, but requires significant adjustments in processes and competencies. Successful implementation strengthens competitiveness and reduces regulatory risks. Companies should invest in taxonomy expertise at an early stage and establish systematic assessment processes.
FAQ
What does EU taxonomy mean for Procurement in concrete terms?
The EU taxonomy requires companies to systematically assess the sustainability performance of their suppliers using science-based criteria. This necessitates new assessment processes, data collection, and the integration of environmental objectives into procurement decisions.
How is supplier taxonomy compliance assessed?
The assessment is based on three taxonomy criteria: significant contribution to environmental objectives, no significant detriment to other objectives, and compliance with minimum social standards. Technical assessment criteria define specific thresholds and requirements for different economic activities.
What are the risks associated with taxonomy implementation?
Key risks include the complexity of assessment criteria, potential market narrowing due to stringent requirements, and data quality issues with supplier information. Greenwashing risks require robust validation processes and regular reviews of supplier data.
How does the EU taxonomy support sustainable procurement strategies?
The taxonomy provides a uniform framework for objectively assessing the sustainability performance of suppliers. It enables data-driven decisions, improves transparency in supply chains, and supports the systematic transformation to sustainable procurement.
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