2.4 Sustainability – NACE and EU Taxonomy

There are several popular taxonomies used to identify and categorise the environmental credentials of business entities and activities. These all aim to measure how business and investment practices contribute – positively or negatively – to the process of climate change. In this document, we look at harmonising three of these taxonomies, namely the EU taxonomy and NACE, with Scientific Infra & Private Assets’s own TICCS® classification system, and identifying a clear mapping across each of the three pairs.

• By considering the EU taxonomy together with TICCS®, analysts can identify the environmental sustainability of infrastructure investment. Combining the two taxonomies reveals the extent to which infrastructure assets contribute to the European Environmental objectives.

• We also consider the European industry classification system NACE alongside TICCS®. Our mapping aligns relevant economic activities identified by NACE to the TICCS® infrastructure activities at the subsector level. (The economic activities of the EU taxonomy are themselves derived using NACE as the basis, but use only those activities relevant only to its environmental objectives. Consequently, its categories do not correspond directly to those activities found in NACE. As a result, some activities listed in the EU taxonomy do not have a NACE code equivalent, while others cover multiple codes.)

The following sections set out the steps taken in applying NACE and EU taxonomy to the TICCS® industry pillar.