In accordance with the EU Taxonomy for sustainable activities, we report in this annual report explicitly about our sustainable activities. The EU Taxonomy is a classification system for economic activities that arose from the EU Action Plan on Sustainable Finance. The EU Taxonomy clarifies which activities can be and cannot be classified as sustainable based on scientific criteria for the prevention of climate change or mitigating the consequences of climate change.
The criteria
An economic activity can qualify as sustainable when it satisfies the criteria that are set out in the EU Taxonomy Delegated Regulations. In these regulations, the criteria for sustainable economic activities are elaborated for six environmental goals:
Climate change mitigation
Climate change adaptation
Sustainable use and the protection of water and marine resources
The transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems
In the EU Taxonomy, reference is made to ‘Taxonomy-eligible’ economic activities and ‘Taxonomy-aligned’ economic activities. When an economic activity corresponds with the description of an activity in the Taxonomy, this is then regarded as an eligible economic activity. When the eligible activity satisfies the technical screening criteria and is carried out taking into account the social minimum safeguards, then this is regarded as a Taxonomy-aligned economic activity. The technical screening criteria consist of criteria to determine whether the activity contributes substantially to one of the environmental objectives and criteria to determine that the activities do not cause serious harm to other environmental objectives. When an activity is classified as Taxonomy-aligned, this means that the economic activity satisfies the criteria to be qualified as sustainable according to the Taxonomy.
As a public interest entity, Enexis reports in accordance with the Taxonomy. For 2023, we reported on three key performance indicators (KPIs), i.e., the share of the revenue, capital expenditure (CapEx), and operational expenditure (OpEx) in connection with eligible economic activities and the share that can then be qualified as aligned.
Our activities with a sustainable character in 2023
The following paragraphs provide an explanation of the way in which Enexis has applied the Taxonomy.
Eligibility
For the determination of the eligible activities, alignment was sought as far as possible with the existing segmentation of our business activities (electricity, gas, and other). The existing activities are compared to the activities described in the Taxonomy. Enexis reports in 2023 on these four eligible activities:
4.9 Transmission and distribution of electricity;
4.15 Distribution of district heating and cooling;
6.5 Transport by motorbikes, passenger cars and light commercial vehicles;
7.7. Acquisition and ownership of buildings.
Enexis has determined that these activities are in accordance with the descriptions as set out in the Taxonomy. The above-mentioned activities can contribute to the first two environmental goals: climate change mitigation and climate change adaptation. The descriptions of these activities do not overlap in the Taxonomy so there is no risk of double counting.
The European Commission published the final delegated regulation in 2023 that describes the economic activities that can contribute to the last four environmental goals. Enexis does not carry out any activities that contribute to one of these environmental goals.
Alignment
Technical screening criteria
The most important activity under the Taxonomy for Enexis is the activity 4.9 ‘Transmission and distribution of electricity’. This activity pertains to one of our core tasks, i.e. the distribution of electricity. Enexis's electricity grid is part of the European network of electricity grids and thus it delivers a substantial contribution to climate change mitigation. Besides customers who purchase electricity from us, there are more and more customers who feed electricity back into the grid. This electricity is mostly generated from solar and wind energy and, in a few cases, also from natural gas, i.e. combined heat and power systems (CHP). As natural gas is a fossil fuel and therefore does not contribute to climate change mitigation, these connections are excluded from alignment. This also applies with regard to the conventional meters as these meters do not satisfy the criteria in the Taxonomy for smart meter systems and therefore do not satisfy the criteria for alignment. It was also concluded regarding activity 4.9 that this activity does not cause serious harm to any of the other environmental objectives. Therefore, the revenue, OpEx, and CapEx in connection with activity 4.9 qualify for alignment, with the exception of the revenue, OpEx, and CapEx attributable to the CHP connections and conventional meters. Activity 4.9 concerns a facilitating activity under the Taxonomy.
Activity 4.15 ‘Distribution of district heating and cooling’ pertains to the district heating and cooling system of Mijnwater Warmte Infra B.V. Although the district heating and cooling system of Mijnwater is one of the most efficient ones in the Netherlands, at present, we are not yet able to demonstrate that it satisfies all the technical screening criteria of the Taxonomy. This is mainly related to proving the sustainability of components in the system that were purchased in the past.
For activity 6.5 ‘Transport by motorbikes, passenger cars, and light commercial vehicles’, it is the case that to satisfy the technical screening criteria, Enexis is strongly dependent on the information that lease companies provide. The relevant information is not available for 2023 and therefore activity 6.5 has not been qualified as aligned.
For activity 7.7 ‘Acquisition and ownership of buildings’, it is the case that Enexis is at present unable to demonstrate that it satisfies the criteria in the Taxonomy for alignment. Therefore, there was no capital expenditure in relation to buildings in 2023 that qualified for alignment.
Social minimum safeguards
The Taxonomy requires an overall assessment of the social minimum safeguards as defined it the Taxonomy. The social minimum safeguards pertain to ethics and human rights and are based on the OECD guidelines for multinational companies and the UN guiding principles on business and human rights.
These requirements pertain to having policy and processes in place to comply with these treaties and guidelines and to transparency in the event of violations thereof. Enexis considers equal rights for everyone and a safe working environment to be very important. Enexis has formulated policy to meet these requirements, for example, in the form of codes of conduct and reporting schemes. You can read more about how Enexis puts this into practice in section ‘working safely and strengthening each other’.
