KPMG’s latest report, Navigating EU Taxonomy: Progress and Pathways to Compliance, reveals key insights into ESG challenges facing European companies, with implications for U.S. firms eyeing global expansion. In reviewing 291 EU companies, the report shows that while 91% reported climate-positive activities, only 24% secured limited assurance for their disclosures, exposing gaps in verification practices that could affect transparency. 

The report identifies major hurdles in taxonomy reporting, with 36% of companies omitting eligibility or alignment data for newly required activities, highlighting adaptation challenges as taxonomy requirements expand to cover six environmental objectives, including pollution prevention and biodiversity restoration. This broadening scope requires companies to assess eligibility across a wider range of activities, a challenge that U.S. firms may also face if they aim to meet EU standards. 

Sectoral discrepancies were also noted, with Utilities leading in taxonomy-aligned turnover, while Consumer Goods lagged, showing industry-specific obstacles. Real Estate and Utilities sectors showed high levels of capital expenditure alignment, indicating robust investment in sustainable initiatives, but lagging sectors may need to address gaps as EU taxonomy regulations influence ESG standards globally. 

Maura Hodge, KPMG U.S. Sustainability Leader, emphasized the importance of these findings for American companies, suggesting the report provides a valuable “roadmap” as the U.S. prepares for potential mandatory ESG disclosures by 2025. With only 33% of companies meeting multiple EU taxonomy objectives, many struggle with the alignment needed for a comprehensive carbon neutral strategy, underscoring that transparency and multi-objective alignment remain critical. 

For U.S. companies with European operations or global ambitions, understanding EU taxonomy gaps and performance benchmarks is essential to align effectively with international carbon neutral and ESG strategies, positioning them for regulatory readiness and competitiveness. 

Sources:  

https://esgnews.com/91-of-eu-companies-report-climate-positive-activities-kpmg-report/ 

https://esgnews.com/tag/eu-taxonomy-disclosures/ 

https://assets.kpmg.com/content/dam/kpmg/se/pdf/komm/2022/Global-Survey-of-Sustainability-Reporting-2022.pdf 

https://www.eib.org/attachments/lucalli/20230023_sustainability_report_2022_en.pdf