EU Taxonomy

The EU’s Six Environmental Objectives

The EU Taxonomy defines six environmental objectives that underpin its classification system for sustainable economic activities:

• Climate change mitigation
• Climate change adaptation
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystems
  

Substantial Contribution and Do No Significant Harm

To be considered environmentally sustainable under the Taxonomy, an economic activity must contribute substantially to at least one of the six objectives by meeting specific technical screening criteria. In addition, it must do no significant harm (DNSH) to the other five objectives and comply with minimum safeguards, such as the UN Guiding Principles on Business and Human Rights, ILO core conventions, and OECD guidelines. In 2024, NRC Group assessed alignment with multiple environmental objectives, although the primary focus remained on climate change mitigation. Key DNSH efforts continued, including climate risk and vulnerability assessments (CRVA) and meeting the minimum 70% recycling rate for business activities.

The EU Taxonomy Reporting Requirements

In Norway, the EU Taxonomy Regulation came into force on 1 January 2023 and applies to large public-interest companies with more than 500 employees. NRC Group meets these criteria and has disclosed the following for 2024:

• The share of Taxonomy-eligible economic activities relative to total activities
• The share of Taxonomy-aligned economic activities relative to total activities
• The required Key Performance Indicators (KPIs) for revenue (turnover), capital expenditure (CapEx), and operating expenditure (OpEx)
• Qualitative information describing the methodology for KPI calculation

These disclosures are based on a comprehensive eligibility and alignment analysis, following the Delegated Acts and industry-specific NACE activity codes. The figures reported are audited by Ernst & Young.

Changes compared to last year’s Reporting

NRC Group has in 2024 conducted a comprehensive analysis of the company’s activities and projects, evaluating them against the economic activities defined in the EU Taxonomy for the countries in which the Group operates. This process involved input from project managers, HSE managers, and financial controllers across the organisation, along with consultation from external experts.

Furthermore, NRC Group reassessed its eligible economic activities and identified five new activities that were not previously reported in 2023, while excluding three of the activities reported last year.

Additionally, the changes in reported KPIs compared to last year’s report stem from a misinterpretation of the EU Taxonomy criteria, which has been corrected in this year’s analysis. Specifically, the aligned projects in last year’s report did not include a comprehensive climate risk and vulnerability assessment (CRVA) due to a misunderstanding of the DNSH criteria for Climate Change Adaption (CCA). In the restated 2023 KPIs, only projects that have conducted a CRVA are considered aligned.

Aligned Activities for NRC Group in 2024

The taxonomy alignment assessment has been conducted at the project level, with priority given to the 10 projects generating the highest revenue. Given that railway projects account for the largest share of revenue, the alignment assessment has focused on economic activity CCM 6.14 Infrastructure for rail transport.

In terms of revenue, 27% of NRC Group’s activities were Taxonomy-aligned in 2024, compared to a restated 22% in 2023. The slight increase reflects a more consistent application of the technical screening criteria, including DNSH principles and minimum safeguards. NRC Group will continue to refine its methodology and expand the scope of its alignment assessments in the coming years.

A full description of the calculation methodology is included in the appendix. The Key Performance Indicators (KPIs) is presented in a table below. Complete KPI templates according to EU’s Annex II to the Disclosures Delegated Act are disclosed in the download below.