Danish Financial Supervisory Authority review finds EU taxonomy reporting improved but only 4.2% of banks’ assets were environmentally sustainable in 2024

The Danish Financial Supervisory Authority has published a thematic review of EU taxonomy reporting by 20 financial firms for financial year 2024 under Article 8 of the Taxonomy Regulation. The review shows a small increase in the share of environmentally sustainable activities compared with 2023 and better compliance with reporting template requirements, but identifies significant shortcomings in qualitative disclosures. For credit institutions, 4.2% of assets in 2024 were classified as environmentally sustainable under the EU taxonomy, while 3.5% of insurance companies’ investments met the same definition, both representing slight increases versus 2023. In contrast, insurers’ insurance activities reported as environmentally sustainable fell from 6.9% in 2023 to 1.8% in 2024, mainly due to a change in measurement methodology at a single company. While formal reporting requirements were generally better met than in 2023, qualitative information was often too high level and in several cases focused on sustainability more broadly rather than on EU taxonomy-specific disclosures. The review is based on the rules currently in force, despite the European Commission’s omnibus simplification package proposed on 26 February 2025 (expected to reduce the number of entities subject to taxonomy reporting) and the Commission’s 4 July 2025 amendments to delegated acts intended to simplify taxonomy reporting and templates. The Danish Financial Supervisory Authority notes that its observations will remain relevant for firms that continue to fall within scope of the requirements.