s a central element of the European Green Deal, the EU Taxonomy is a classification system that defines which economic activities are considered environmentally friendly and sustainable. It is intended to help investors invest in projects that truly make a positive contribution to the environment and supports companies in aligning themselves with a sustainable future.
To meet the requirements of the EU Taxonomy, structured planning and technical support are needed. In this article, we explain the basics of the regulation and, with our expertise, support you in the search and selection of suitable EU Taxonomy software based on your individual criteria.
If you already know your way around the EU taxonomy, have heard about our free matching service, and want to start the selection process for a tool based on your criteria right away, there's a shortcut here.
The key objectives of the EU Taxonomy include combating climate change and promoting a sustainable economy. The aim is to channel financial resources specifically into “green” activities and to provide clarity on what is considered sustainable.
The EU Taxonomy offers investors a uniform and transparent system to compare companies directly and to invest their financial resources specifically in sustainable companies. However, it does not oblige anyone to make sustainable investments or carry out sustainable economic activities. Instead, the primary focus is on labelling “green” activities. Which activities are considered “green” is defined by the EU’s following six environmental objectives:
Climate change mitigation (Environmental/Climate objective 1)
Climate change adaptation (Environmental/Climate objective 2)
Protection of water and marine resources (Environmental objective 3)
Transition to a circular economy (Environmental objective 4)
Pollution prevention (Environmental objective 5)
Protection and restoration of biodiversity and ecosystems (Environmental objective 6)
An economic activity is only considered sustainable if it does not cause significant harm to any of the other objectives (DNSH principle, Do No Significant Harm). More specifically, an activity is classified as sustainable if it
makes a genuine contribution to environmental protection (e.g. CO₂ reduction),
does not cause significant harm to other environmental objectives, and
meets social standards such as occupational health and safety and human rights.
In addition to the environmental objectives, companies must comply with social standards, such as labour rights, human rights, and OECD standards for multinational enterprises.
Since 1 January 2021 (reporting in 2022), the EU Taxonomy has applied to large, publicly listed companies that until then fell under the Non-Financial Reporting Directive (NFDR).
In January 2024, the NFDR was replaced by the Corporate Sustainability Reporting Directive (CSRD). This significantly expands the group of companies required to report—and therefore also affected by the EU Taxonomy.
From financial year 2025 onwards, many SMEs will also fall under the reporting obligation. The earlier you engage with the requirements of the EU Taxonomy, the more future-proof you will be positioned.
If we leave aside the large, publicly listed companies that are already reporting, the following deadlines from 2025 apply:
From 1 January 2025 for all other large companies (reporting in 2026)
From 1 January 2026 for all publicly listed small and medium-sized enterprises, with the exception of micro-enterprises (reporting in 2027)
Companies must disclose what percentage of their revenues, investments, and operating expenses relate to sustainable activities—i.e., how much “green” business they actually do.
A taxonomy-aligned report must answer the following questions:
How much revenue comes from sustainable activities?
How much is invested in sustainable projects (CapEx)?
How high are the expenses to support sustainable activities (OpEx)?
Companies must demonstrate that their activities meet the technical screening criteria. These are specific, science-based requirements that define what exactly counts as sustainable—i.e., strict thresholds for emissions, energy efficiency, and much more.
The reports must be updated annually to document progress and changes in the area of sustainability. This isn’t just about numbers, but also about consistency and comparability. The reports should show how your green activities develop over the years.
Disclosure under the EU Taxonomy is very complex due to the amount of data and the level of detail required for the metrics. Many companies don’t yet have the necessary information readily available, and the effort involved in implementing all of this is often underestimated. For it to work, internal processes must be adapted to the new requirements. At this point, you should also think about appropriate sustainability tools. It’s worth starting early with the collection and analysis of taxonomy-relevant data—even if your company is not yet required to do so.
Taxonomy software will be crucial both for getting started with your ESG reporting activities and for the ongoing processes that follow. All processes of data collection, analysis and reporting are automated and standardized:
Automating data collection
Taxonomy tools can centrally capture and consolidate data from a wide range of sources. Instead of searching and sorting manually, the software does this automatically, saving you time and eliminating potential sources of error.
Calculating KPIs
Calculating the key metrics (taxonomy-aligned revenue, investments and operating expenses) is more than simplified with an appropriate software solution. The tool can process the data directly and calculate the relevant KPIs for you, without you having to check every single number yourself.
Keeping compliance in view
Specialized software helps you keep track of the EU Taxonomy requirements. It monitors whether all technical criteria and the DNSH principle (Do No Significant Harm) are being met and alerts you if deviations occur.
Updates and legal changes
The EU Taxonomy is continuously being further developed by the EU. New requirements and regulations are updated automatically in the software.
Reporting and transparency
The taxonomy tool can prepare your reports for sustainability reports or annual reports in a structured way. This creates a transparent and easy-to-understand presentation of taxonomy-aligned activities and provides investors and other stakeholders with a better basis for decision-making.
Consistency and comparability
With software, you can ensure that your reports remain consistent and comparable over the years. This allows you to track progress and demonstrate how your company’s sustainability performance is evolving.
Integration with other ESG regulations
Often, you not only have to comply with the EU Taxonomy, but also other ESG standards (CSRD, LkSG / CSDDD, EUDR). An all-in-one software solution can cover numerous directives and regulations or offers different modules that can also be added at a given time, so you can manage everything in one place.
A software solution definitely helps you manage the complexity of the EU Taxonomy, saves you a lot of time and ensures that you always remain compliant. Especially for larger mid-sized companies with many data points and complex activities, such a solution is almost indispensable.
Many affected companies are currently looking for a technical solution for the EU Taxonomy, want to compare different software providers and hold initial discussions.
For more than two years, the Matchilla team has continuously analyzed the rapidly growing market for ESG tools. In our database, we record all relevant software and tool providers and examine both hard and soft factors, such as available modules, functions, languages, interfaces, industry expertise, prices, and much more.
You can now benefit from our own comprehensive software selection thanks to our extensive market overview in the DACH region as well as our expertise from over 700 ESG software comparisons that we have carried out as part of our matchings for medium-sized companies and corporations. We are happy to support you in creating a catalog of criteria, a structured provider comparison through to the final decision – with our well-founded insights.
This is how the provider comparison works: You only invest a few minutes in filling out the Taxonomy Match Assistant, and we will find the three software providers that best match your requirements.
The best part: This software comparison is free of charge for you, anonymous to the providers, and non-binding (see FAQ).
Would you like to know which solution fits your requirements? Simply fill out the Taxonomy Match Assistant. 
The search for a suitable ESG software application is simple and super-fast via Matchilla. Getting in touch, formulating specifications, and after just a few days the results were there. This way we got information about software we hadn’t even heard of before. A real added value. Thank you, dear Matchilla team.
What convinced me about Matchilla were the short, clear paths: our specific need is understood immediately, analyzed perfectly, and matched with the right providers in a short time. Matchilla’s platform works quickly, uncomplicatedly, and at the same time precisely, providing direct added value in the selection of service providers.
The newly formed ESG software market is opaque, and both vendor research and selection are complex and complicated.
We have already successfully carried out the criteria definition and selection process that lies ahead of you for over 700 companies (SMEs and corporations). As a result, we likely have the best-maintained market overview of ESG software providers in the German-speaking region.
We replicate the best possible taxonomy solution for your situation based on our experience and act as your guide through the vendor jungle.
Using the Matchilla platform is free of charge, non-binding, and anonymized vis-à-vis providers for you. Our data matching as well as the personal service to help you choose the best software for you is enabled through the providers’ platform fees. In general, we do not have any paid contractual relationship with you.
Think of Matchilla as your neutral sparring partner in this selection process. We want your company to use the Matchilla platform for many more provider searches in the future and for you to recommend us to your colleagues out of your own interest.
Start by filling out the criteria catalogue (Match Assistant) for a taxonomy software. This gives us an initial, very good insight into your requirements. After that, we can optionally get in touch with you personally to ask about any missing specifications. This helps us refine the selection criteria and feed our personal experience in addition to the data matching into the matching process.
Our selection process is then based on an efficient interplay of data, algorithms, and a healthy dose of personal expertise. From the aggregated input, we create an individual shortlist (matchboard) on the platform with providers that ideally match your requirements.
If your specifications are detailed and sufficient, you can use Matchilla as a tendering platform for procurement and receive price quotes directly from providers that comply with your compliance rules. Using the invite function, you share the offers not only with procurement, but with all other decision-makers in your company.
Try it/us with no obligation: We’re looking forward to the matching!
Ulli Theves is Head of ESG Software Matching at Matchilla and an expert in technical solutions in the field of sustainability. In MatchZINE, he shares his expertise and regularly publishes news and useful information on the topic of ESG.
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