Taxonomy-aligned business activities
A business activity is deemed to be taxonomy-aligned if it complies with the technical screening criteria of the EU Taxonomy and therefore makes a substantial contribution to at least one environmental objective. At the same time, in accordance with Article 17, it may not cause any significant harm to the other environmental objectives (do no significant harm – DNSH) and must also comply with the minimum social standards as described in Article 18.
To screen the taxonomy alignment of taxonomy-eligible business activities, thyssenkrupp creates profiles of the requirements for each relevant economic activity on the basis of the delegated acts. These profiles contain the qualitative and quantitative screening criteria as well as the resulting documentation and verification requirements. They serve as the basis for the site- and segment-related screening procedures in the reporting year. The overall process is coordinated centrally by an interdisciplinary team of experts and implemented in collaboration with the operating entities.
Turnover is the primary parameter for the technical screening criteria used in the screening procedures. This also applies to the CapEx and OpEx allocated to an economic activity, irrespective of their specific use. Although such expenditure may be allocated in part to other economic activities with different criteria defined in the delegated acts, this is ruled out by applying the principle that turnover has priority. As a result, the screening procedure focuses on activities that generate turnover. In the case of activities relating to research or development that do not generate external turnover, the criteria may be based instead on the associated CapEx or OpEx.
Capital expenditure made in the context of a CapEx plan represents a special aspect of the screening procedure because the necessary verification of compliance with the technical screening criteria may not be available in full at the reporting date and must be provided at a later date.
The following paragraphs describe all the business activities that achieved a positive result in the screening procedure in the reporting year. They include a description of the screening criteria applied in each case and the method used to determine the material environmental contribution and any DNSH criteria relating to the activity. The procedure for screening the general DNSH requirements and minimum safeguards defined in Article 18 is explained separately.
CCM 3.1 Manufacture of renewable energy technologies
The technical screening criteria define that the manufactured technologies only contribute to climate change mitigation if they are used to generate renewable energy in accordance with Article 2 (1) of Directive (EU) 2018/2001. At thyssenkrupp, verification that the slewing bearings it manufactures are used in wind energy installations is provided by outgoing invoices from which customer groups can be identified. The DNSH criteria were screened on the basis of general auditing practices and verification documents. In addition, an equivalence assessment was carried out for relevant sites in third countries – specifically in China. Relevant European legislation (Regulation (EU) 2020/852, Directive 2000/60/EG, Directive 2011/92/EU) were compared with suitable Chinese laws such as the Water Law of the People’s Republic of China and the Environmental Impact Assessment Law of the People’s Republic of China, including the associated technical guidelines. On the basis of this assessment, de jure equivalence was established for environmental requirements.
CCM 3.2 Manufacture of equipment for the production and use of hydrogen
The technical screening criteria define that equipment are only deemed to contribute to climate change mitigation if they are used to produce hydrogen or hydrogen derivatives and the products manufactured reduce greenhouse gases during their life cycle in accordance with Annex V to Directive (EU) 2018/2001. For the water electrolysis plants screened in the reporting year, the tender documents issued by the EU Innovation Fund were used as verification. The DNSH criteria were screened on the basis of general auditing practices and documents.
CCM 3.9 Manufacture of iron and steel
According to the technical screening criteria, a substantial contribution to climate change mitigation exists if the emission thresholds for the individual steps in iron and steel production are complied with and – if relevant – process-dependent requirements for the use of secondary raw materials are satisfied. This was confirmed for the flat steel products bluemint® pure and bluemint® recycled because the emissions calculated for the balance sheet are within the specified thresholds. Product-specific certificates from an independent certification body were used for this purpose. Due to the processes involved, requirements for the use of secondary raw materials are not relevant for either product. Compliance with the DNSH criteria was screened on the basis of general auditing practices and verification documents. For this economic activity, it is also necessary to comply with the emission thresholds based on the best available technology (BAT). At the Duisburg site, the existing operating permits in accordance with European and German law are evidence of compliance with the applicable emission thresholds for iron and steel production. Moreover, no cross-media environmental impacts were identified in the reporting period.
CCM 3.18 Manufacture of automotive and mobility components
According to the technical screening criteria, a substantial contribution to climate change mitigation exists if the components produced serve a key function in decarbonizing the mobility sector – for example, through their use in vehicles with no direct carbon exhaust emissions such as battery electric vehicles (BEVs). In the reporting year, automotive components supplied by thyssenkrupp Automotive Technology and Materials Services for use exclusively in electric vehicles were assessed for their taxonomy alignment. To this end, vehicle projects were analyzed to establish whether they satisfied the criterion of “100% BEV.” Compliance with the DNSH criteria was screened on the basis of general practices and verification documents. In addition, an equivalence assessment was carried out for relevant sites in third countries – specifically in China, the USA and Mexico. In China, the relevant European legislation (Regulation (EU) 2020/852, Directive 2000/60/EC, Directive 2011/92/EU) was compared with the Water Law of the People’s Republic of China and the Environmental Impact Assessment Law, including technical guidelines; de jure equivalence was established for environmental requirements. In the case of the USA and Mexico, relevant national legislation was also considered, including the Clean Water Act (CWA), the National Environmental Policy Act (NEPA) and relevant EPA regulations for the USA and the Ley de Aguas Nacionales, various Normas Oficiales Mexicanas (NOMs) and the Ley General del Equilibrio Ecológico y la Protección al Ambiente (LGEEPA) for Mexico; these were assessed to be largely equivalent.
CCM 5.9 Material recovery from non-hazardous waste
According to the technical screening criteria, a substantial contribution to climate change mitigation exists if at least 50% in terms of weight of the processed non-hazardous waste is converted into secondary raw materials that can be used in place of primary raw materials. The slag processing activity that was screened for alignment in the reporting year exceeded this amount and the secondary raw materials obtained were used in place of primary construction materials and fertilizers. This was verified by an analysis performed by a research institute specialized in construction materials. Compliance with the DNSH criteria was screened on the basis of general auditing practices and verification documents.
DNSH criteria “Climate change adaptation”
In accordance with the DNSH criteria for climate change adaptation, a climate risk and vulnerability assessment must be performed. This must be used to assess and, if necessary, implement appropriate adaptation solutions in order to effectively manage the risks identified. A site-related analysis of the possible climate risks was performed on the basis of recognized climate scenarios – especially RCP2.6 und RCP8.5 – for the business activities screened for taxonomy alignment in the reporting year. If risks were identified, this information was sent to the sites to enable them to determine the actual vulnerability (i.e., the site-specific probability of occurrence taking account of local conditions) to these climate risks using local sensitivity analyses. In addition, appropriate adaptation solutions were identified and implemented as necessary.
DNSH criteria “Sustainable use and protection of water and marine resources”
In accordance with the DNSH criteria relating to the sustainable use and protection of water and marine resources, a risk analysis of water quality and availability must be conducted and remedial action initiated if necessary, unless this is already covered by an environmental impact assessment (EIA) in accordance with Directive 2011/92/EU. In third countries, such analyses must be performed on the basis of national law or international standards if these ensure a comparable level of protection. For all the activities screened in the reporting year, site-related verification was obtained that enabled screening of compliance with these requirements, for example, permits, EIA documents, environmental audits and separate risk analyses.
DNSH criteria “Transition to a circular economy”
As a rule, the DNSH criteria in respect of the transition to a circular economy require an assessment of the availability and, where feasible, adoption of suitable techniques that support the following practices:
Use of secondary raw materials and reused components in manufactured products
Design for high durability, recyclability, easy disassembly and adaptability of products
Waste management that prioritizes recycling over disposal
Information on and traceability of substances of concern in products
For all the business activities screened in the reporting year, either a site-related assessment of the availability and application of the required processes and practices was conducted or existing verification documents showing compliance with these requirements were used, including operating permits, compliance and environmental audits or product-specific documents relating to material composition or other relevant properties.
DNSH criteria “Pollution prevention and control”
The DNSH criteria in this area require that economic activities do not lead to the manufacture, placing on the market or use of substances or groups of substances that are restricted or banned by European regulation. In particular, this relates to:
Persistent organic pollutants as defined in Annexes I and II to Regulation (EU) 2019/1021
Mercury and mercury compounds or mercury mixtures as defined in Article 2 of Regulation (EU) 2017/852
Ozone-depleting substances as defined in Annexes I and II to Regulation (EC) No 1005/2009
Hazardous substances in electrical and electronic appliances as defined in Annex II to Directive 2011/65/EU
Chemical substances as defined in Annex XVII to Regulation (EC) No 1907/2006 (REACH)
SVHCs (substances of very high concern) > 0.1% by mass, identified in accordance with REACH Article 59 (1), unless these substances have complied with Article 57 for at least 18 months
Exemptions apply if:
substances occur only as unintentional trace contamination;
the provisions of the respective regulation are complied with in full; or
there are verifiably no available alternatives to SVHCs and they are used in a controlled manner.
For all the business activities screened in the reporting year, site-related verification was obtained which confirms that none of the aforementioned substances – either on their own, in mixtures or in articles – are placed on the market or used or are only used in the context of permissible exemptions. Suitable verification includes, in particular::
CLP substance lists (CLP = classification, labeling and packaging) in accordance with Regulation (EC) No 1272/2008
Declarations of conformity
Safety data sheets
Declarations of RoHS compliance (RoHS = restriction of hazardous substances)
DNSH criteria “Protection and restoration of biodiversity and ecosystems”
The DNSH criteria relating to the protection and restoration of biodiversity and ecosystems require the completion of an environmental impact assessment (EIA) or similar assessment in accordance with Directive 2011/92/EU, including the implementation of any necessary mitigation and remedial measures. For business activities conducted in or near biodiversity-sensitive areas (e.g., Natura 2000 areas, UNESCO World Heritage sites or other protected areas), it may be necessary to conduct additional compatibility assessments in accordance with Directive 2009/147/EC on the conservation of wild birds (Wild Birds Directive) and Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora (FFH Directive). If necessary, actions must be taken to prevent negative impacts on the conservation targets. In third countries, national regulations or international standards must be applied if they ensure a comparable level of protection. For the activities screened in the reporting year, site-related verification was obtained that can be used to check compliance with the requirements. Such verification includes:
Operating permits
Preliminary EIA reviews or full EIAs
Environmental audits
Risk analyses of biodiversity and ecosystem protection
Compliance with the minimum safeguards
In accordance with Article 18 of the EU Taxonomy, undertakings must comply with certain minimum safeguards if they are to disclose turnover, investments or operating expenditure as taxonomy-aligned. This assumes that the undertaking has established processes that serve to ensure compliance with key international standards, including the:
OECD Guidelines for Multinational Enterprises
UN Guiding Principles on Business and Human Rights (UNGP)
ILO Declaration on Fundamental Principles and Rights at Work
International Bill of Human Rights
At thyssenkrupp, these requirements are embedded in binding corporate policies – the Code of Conduct (CoC), the principles of compliance with human rights and environmental due diligence obligations and the corporate governance statement. These are flanked by control and management systems such as compliance, risk and internal control management, which serve to ensure compliance with the minimum safeguards and the initiation of remedial action. The effectiveness of this process is reviewed regularly.