According to the Taxonomy Regulation, the companies that are required to report in accordance with the Non-Financial Reporting Directive (2014/95/EU) must comply with the reporting requirements of the Taxonomy Regulation. This requirement applies to L&T. L&T has assessed the taxonomy eligibility and taxonomy alignment of its activities. The EU taxonomy assessment has been conducted for net sales generated by business operations, capital expenditure and operating expenditure related to climate change mitigation. L&T reports on taxonomy at the Group level. L&T’s Renewable Energy Sources business operations are not included in the taxonomy calculation.
Taxonomy alignment assessment is based on the industry-specific technical screening criteria described in the Taxonomy Regulation and the Do No Significant Harm requirements. The technical screening criteria have been examined side by side in order to achieve the greatest possible consistency in reporting and to avoid double accounting. In addition to separate technical requirements, the Taxonomy Regulation provides for minimum safeguards that L&T has assessed at the Group level. L&T’s taxonomy alignment has been assessed on the basis of the technical screening criteria and related NACE codes set out in Annex 1 (Climate change mitigation) of the Taxonomy Regulation. The assessment was carried out in cooperation with environmental specialists of the divisions.
The financial indicators concerning the taxonomy are based on figures extracted from L&T’s financial management systems and ERP systems. For capital expenditure and operating expenditure, data from 2022 was analysed and compared to the screening criteria. Some of L&T’s measures, such as installing solar panels in offices, could fall within the scope of the taxonomy. However, this capital expenditure does not represent a significant proportion of the total investment. L&T does not have separate capital or operating expenditure plans for the taxonomy.
- The business operations of the Environmental Services division include, for example, the collection and transport of non-hazardous waste in waste fractions and the recovery of materials from non-hazardous waste.
- The business operations of the Industrial Services division include, for example, the renewal of wastewater collection and treatment as well as the transport of soil in connection with environmental construction.
- The business operations of the Facility Services division include, for example, the installation, maintenance and repair of energy efficiency equipment and renewable energy technology, as well as the installation, maintenance and repair of instruments and devices for measuring, regulating and controlling the energy performance of buildings.
Future Outlook
The circular economy is a key way of mitigating climate change. L&T’s mission is to make the circular economy a reality. All of the Group’s businesses build future sustainable growth for the circular economy and are based on the opportunities it creates. The Board of Directors has set L&T a long-term goal of increasing the carbon handprint faster than net sales. L&T also continues to invest in the achievement of climate targets by purchasing zero-emission vehicles, for example.
The EU taxonomy is still a work in progress, and L&T’s assessment may change when new parts of the taxonomy are completed. In particular, the criteria related to a circular economy are closely linked to L&T’s business.
