EU Taxonomy

In 2020, the EU Taxonomy entered into force. The EU Taxonomy was part of the EU Green Deal, Europe’s strategy to become the first climate-neutral continent in 2050. The EU Taxonomy serves as a classification system summarising what activities are and are not considered ecologically sustainable. For information on the content of the Taxonomy, please see the website of the European Union.[1]

Heijmans is subject to the EU Taxonomy. In the year under review, the EU Taxonomy required us to look at which part of our revenue/CapEx/OpEx is eligible for the Taxonomy and which part is actually aligned with the criteria as described in the new legislation for our climate adaptation and climate mitigation goals. Due to a lack of a legal framework, we did not examine the other four themes[2] within the Taxonomy.

Activities that are eligible for the EU Taxonomy

In the analysis on the eligibility of the business activities, Heijmans used the currently available EU documents that contain the definitions and clarifications for non-financial companies:

  • The Climate Delegated Acts published by the EU Commission on 6 July 2021

  • The Complementary Climate Delegated Act published by the EU Commission on 15 July 2022

  • The report also uses an FAQ document (related to the EU Taxonomy legislation on the reporting of eligible economic activities and assets) published by the EU Commission on 10 October 2022.

For the analysis for the 2022 financial year, we have excluded the ‘Draft Commission notices on the interpretation and implementation of certain legal provisions of the EU Taxonomy’, published on 19 December 2022. The exclusion of these documents is based on the fact that the largest part of the eligibility and alignment analysis had already taken place before the publication of these specifications. Heijmans will include any insights gained from these specifications in future reports.

We have drawn up as granular a division as possible of the business activities (including distinguishing between laying infrastructure for rail traffic, road traffic, water traffic, etc.) from the descriptions of activities in the ISO9001 and ISO14001 certifications, and then mirrored these with the descriptions in the Taxonomy.

 TAXO1 - eligible activities linked to business area

Activitities that contribute to the mitigation of climate change

4.1

The generation of electricity using photovoltaic solar energy technology

Infra*

4.3

The generation of electricity from wind energy

Infra

4.9

Transmission and distribution of electricity

Infra

4.15

Distribution of district heating and cooling

Infra

5.1

The construction, expansion and operation of systems for the extraction, treatment and distribution of water

Infra

5.2

The renewal of systems for the extraction, treatment and distribution of water

Infra

5.3

The construction, expansion and operation of systems for the capture and treatment of waste water

Infra

5.4

The renewal of systems for the capture and treatment of waste water

Infra

7.1

The construction of new buildings

Infra/B&T/PD

7.2

The renovation of existing buildings

B&T/PD

7.3

The installation, maintenance and repair of energy-efficient installations

Infra/B&T

7.4

The installation, maintenance and repair of electric vehicle charging stations in buildings (and car parks connected to buildings)

Infra/B&T

7.5

The installation, maintenance and repair of instruments and equipment for measuring, controlling and monitoring the energy performance of buildings

B&T

7.6

Installation, maintenance and repair of renewable energy-related technologies

Infra/B&T

7.7

The acquisition and ownership of buildings

PD

9.1

Research, development and innovation aimed at direct air capture of CO2

Infra

Activities that contribute to climate change adaptation

6.13

Infrastructure for persona mobility , cycling logistics

Infra

6.14

Infrastructure for train travel

Infra

6.15

Infrastructure for road transport and public transport

Infra

6.16

Infrastructure water transport

Infra

6.17

Airport infrastructure

Infra

  • *B&T = Building & Technology; PD = Property Development.

Subsequently, for each of the Group’s sectors, we placed the revenue at project level in one of the set environmental activities, based on the description and content of the project in question. We have excluded inter-company revenue to prevent revenue from being counted twice. At the same time, we assessed revenue at project level for (non-)eligibility directly. We identified the revenue that is non-eligible on the basis of the nature of the project. This pertains to revenue in non-carbon-free air-side airport infrastructure, maintenance on take-off and landing runways, electrical installations for road infrastructure, but also revenue in telecoms and works at clients in the petrochemical industry.

The eligibility analysis revealed that 90.6% of Heijmans’ revenue is eligible, and 9.4% of the revenue is non-eligible.

Because Heijmans cannot assign all investments or operational costs to specific projects or activities, the CapEx and OpEx have been assigned on a pro rata basis. See the next section for an explanation.

Burden of proof EU Taxonomy alignment

Revenue

For the first year in which it is obliged to prove alignment, Heijmans has chosen not to prove alignment for all environmental activities. A number of activities have insufficient overlap between the project administration internally (and/or at the client) and the burden of proof of the Taxonomy. Other environmental activities has sufficiently limited revenue that establishing the alignment of these activities does not have an impact on Heijmans’ total alignment score. We have recognised the revenue from activities for which there is as yet no burden of proof or this burden of proof has not yet been evaluated as non-aligned revenue.

For the reporting year 2022, we chose to limit the alignment analysis to two large revenue-generating business activities. These are the activities ‘7.1 Construction of new buildings’ and ‘6.15 Infrastructure for road traffic and public transport’. Together, these two activities represent roughly 62% of Heijmans’ total revenue.

We assessed the alignment with two aforementioned Taxonomy environmental activities (7.1CCM and 6.15CCA) on the basis of two example projects. We determined the minimum number of required example projects on the basis of a selection protocol[3].

We then extrapolated the alignment percentage resulting from the example projects we assessed to all similar projects within the business area and the relevant Taxonomy Environmental Activity. We assumed non-alignment for any environmental activities for which no example projects were assessed.

For the burden of proof, we relied as much as possible on internally available documents. For a number of criteria, Heijmans had no choice but to rely on policy documents that fell outside of our own operational control. For these criteria, Heijmans shifted the burden of proof to the relevant client:

  • Establishing relevant climate risks and determining the associated adaptation solutions, because this can only effectively take place during the initiative and design track of projects.

  • Water management plans and ecological studies are part of the procedural regulations that lead to zoning plans and environmental permits, normally as part of an environmental impact report. The aforementioned plans and studies are carried out by or on behalf of clients.

In the coming years, Heijmans is committed to expanding both its own information gathering systems at project and group level, as well as information requests to clients for improved Taxonomy reporting. The aim of this is to achieve a complete overview and understanding of Taxonomy alignment for each individual project as quickly as possible.

CapEx

Total CapEx (the denominator) consists of the sum of the additions to property, plant and equipment (see Financial statements 6.10 Property, plant and equipment) and the additions to leased rights-of-use assets (see Financial statements 6.11 Leases). Following the deduction of overheads, we determined per addition for which Group sector and which environmental activities this CapEx will be used. We divided the CapEx into two categories:

  1. Investments in connection with a plan to develop activities that are aligned with the Taxonomy. In 2022, we spent approximately € 6 million in this category, which related to investments in the timber frame production facility in Heerenveen.

  2. Investments that do not fall under the previous category. We determined per addition for which of the Group’s sectors this CapEx will be used. The relevant CapEx has been qualified as eligible (the numerator) insofar as the activities of the relevant sectors are eligible for the taxonomy. These additions were subsequently qualified as aligned with the Taxonomy, in proportion to the degree to which the relevant revenue has been qualified as aligned with the Taxonomy.

OpEx

Total OpEx (the denominator) consists primarily of the following items:

  • Short-term leases (see Financial statements 6.11 Leases)

  • Research and development costs (see Financial statements 6.5 Personnel expenses, depreciation and research and development costs)

OpEx also includes costs related to maintenance and repairs and all other direct expenses related to the day-to-day maintenance of property, plant and equipment by Heijmans or by third parties to whom we outsource activities required for the continuous and effective operation of such assets.

We determined which costs were incurred for which sectors. Insofar as the activities of the sectors in question were eligible for the taxonomy and did not pertain to indirect activities, the related OpEx (the numerator) was also qualified as eligible. This OpEx was subsequently qualified as aligned with the taxonomy, in proportion to the degree to which the relevant revenue is qualified as aligned.

Minimum Social Safeguards

Through their activities, companies can have a direct and indirect impact on human rights in the Netherlands and the rest of the world. Heijmans endorses the general principles of the so-called OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business & Human Rights, which describe the special role of companies in respecting all human rights.

A few years ago, Heijmans carried out an analysis of the most relevant human rights for Heijmans. This showed that providing a safe working environment is the most important aspect, followed by human rights in the chain. We have implemented measures to limit potential impacts.

Many topics related to this theme are a standard part of Heijmans’ safety, HR and procurement policies. These include matters such as ensuring good working conditions, freedom of association (trade unions), applying fair and equal pay and taking sustainability aspects into account in procurement. Heijmans also has the 'This is how we work' code of conduct. This theme also includes the implementation of the actions taken by Heijmans as a result of the Act on Combatting Sham Arrangements (Wet Aanpak Schijnconstructies). Internal and external stakeholders are given the opportunity to report abuses in the chain, for example via the whistle-blower scheme we set up. In this way, Heijmans assumes its responsibility throughout the chain.

Suppliers and subcontractors are involved in procurement and chain responsibility and sign their own statement (supplier sustainability statement) to the effect that they comply with human rights. Human rights are therefore part of the Heijmans Sustainable Procurement policy and account management. Significant risk-mitigating factors are the fact that Heijmans does not perform construction activities outside the Netherlands and that most raw materials and products come from Europe. However, the rest of the supply chain is exposed to such risks. Some of these risks are covered by buying certified products and using certified suppliers. An example of this is our decision to buy only sustainably certified timber (both FSC and PEFC).

Conclusions of Taxonomy analysis

Revenue

Total revenue to be assessed in the Taxonomy consists of revenue from projects for third parties from the Group's various sectors, including revenue obtained from joint operations (see Financial Statements 1. Consolidated Statement of profit or loss).

For the reporting year 2022, Heijmans decided to limit the alignment reporting to two major revenue-generating business activities. These are the activities '7.1 Construction of new buildings' and '6.15 Road and public transport infrastructure'. Together, these two activities represent 62% of Heijmans' total revenue. These activities are included in table TAXO3 under A.1.

The other activities are included in table TAXO3 under A.2. We have chosen to label all revenue from these environmental activities as non-aligned this reporting year. 

TAX03 REVENUE

Economic activity

Absolute revenue (in millions)

Share of revenue

Substantial contribution to climate mitigation

Substantiial contribution to climate adaptation

DNSH criteria

Minimum guarantees

Share of taxonomy aligned revenue, year 2022

Share of taxonomy aligned revenue, year 2021

Category (facilitating activity (F))

Category ('transition activity'(T))

%

%

%

Y/N

Y/N

%

%

F

T

A. TAXONOMY ELIGIBLE ACTIVITIES

A.1. Ecologically sustainable activities (taxonomy aligned)

Construction of new buildings

860

47.4%

29.2%

n.v.t.

J

J

15.2%

n.a.

0

0

Construction and maintenance of infrastructure for road transport

249

13.8%

n.v.t.

24.7%

J

J

3.8%

n.a.

0

0

Revenue from ecologically sustainable activities (taxonomy aligned) (A.1.)

1,109

61.2%

19.1%

n.a.

0

0

A.2. Taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities)

Other activities cf. table TAX01

533

29.4%

Revenue from taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities) (A.2.)

533

29.4%

Total (A.1. + A.2.)

1,643

90.6%

19.1%

n.a.

0

0

B. Non-taxonomy eligible activities

Non-taxonomy eligible revenue (B)

170

9.4%

Total (A + B)

1,812

100.0%

CapEx

Total CapEx consists of the sum of additions to property, plant and equipment (see financial statements 6.10 Property, plant and equipment) and additions to leased rights-of-use assets (see financial statements 6.11 Leases). Table TAX04 below shows the result.

TAX04 CAPEX

Economic activity

Absolute CapEx (in thousands)

Share CapEx

Substantial contribution to climate mitigation

Substantiial contribution to climate adaptation

DNSH criteria

Minimum guarantees

Share of taxonomy aligned CapEx, year 2022

Share of taxonomy aligned CapEx, year 2021

Category (facilitating activity (F))

Category ('transition activity'(T))

%

%

%

Y/N

Y/N

%

%

F

T

A. FOR TAXONOMY ELIGIBLE ACTIVITIES

A.1. Ecologically sustainable activities (taxonomy aligned)

Construction of new buildings

9,803

25.4%

88%

n.a.

J

J

31.1%

n.a.

0

0

Construction and maintenance of infrastructure for road transport

8,701

22.5%

n.a.

50.00%

J

J

15.8%

n.a.

0

0

CapEx ecologically sustainable activities (taxonomy aligned) (A.1.)

18,504

47.9%

46.9%

n.a.

0

0

A.2. Taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities)

Other activities cf. table TAX01

9,081

23.5%

CapEx taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities) (A.2.)

9,081

23.5%

Total (A.1. + A.2.)

27,585

71.4%

46.9%

n.a.

0

0

B. Non-taxonomy eligible activities

CapEx non-taxonomy eligible revenue (B)

11,072

28.6%

Total (A + B)

38,657

100.0%

OpEx

Total OpEx consists primarily of the items current leases (see financial statements 6.11 Leases) and research and development costs (see financial statements 6.5 Personnel expenses, depreciation and research and development costs). OpEx also includes costs for maintenance and repair, as well as all other direct expenses related to the day-to-day maintenance of property, plant and equipment by Heijmans. OpEx also includes the costs of third parties to which Heijmans outsources activities required for the continuous and efficient operation of such assets.

Table TAX05 below shows the result.
TAX05 OPEX

Economic activity

Absolute OpEx (in thousands)

Share OpEx

Substantial contribution to climate mitigation

Substantiial contribution to climate adaptation

DNSH criteria

Minimum guarantees

Share of taxonomy aligned OpEx, year 2022

Share of taxonomy aligned OpEx, year 2021

Category (facilitating activity (F))

CCategory ('transition activity'(T))

%

%

%

Y/N

Y/N

%

%

F

T

A. FOR TAXONOMY ELIGIBLE ACTIVITIES

A.1. Ecologically sustainable activities (taxonomy aligned)

Construction of new buildings

18,073

17.0%

29%

n.a.

Y/N

Y/N

6.8%

n.a.

0%

0

Construction and maintenance of infrastructure for road transport

23,542

22.2%

n.a.

24.7%

Y/N

Y/N

7.5%

n.a.

0%

0

OpEx ecologically sustainable activities (taxonomy aligned) (A.1.)

41,615

39.2%

14.2%

n.a.

0%

0

A.2.Taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities)

Other activities cf. table TAX01

36,395

34.3%

OpEx taxonomy eligible, but not ecologically sustainable activities (non-taxonomy aligned activities) (A.2.)

36,395

34.3%

Total (A.1. + A.2.)

78,010

73.4%

14.2%

n.a.

0%

0

B. Non-taxonomy eligible activities

OpEx non-taxonomy eligible revenue (B)

28,245

26.6%

Total (A + B)

106,255

100.0%

Accounting policy

The KPIs revenue/CapEx/OpEx are calculated in line with the requirements of Art. 8 of the EU Taxonomy legislation for the financial year 2022 (01/01/2022 - 31/12/2022).

CapEx and OpEx can be labelled as aligned in three ways. Heijmans' aligned CapEx/OpEx refers, on the one hand, to assets or processes related to taxonomy-aligned economic activities and, on the other hand, to the purchase of outputs from taxonomy-aligned economic activities and with individual measures that enable the target activities to decarbonise or lead to reductions in greenhouse gas emissions. For a description of how Heijmans determined the eligibility and alignment of CapEx and OpEx, see section Burden of proof EU Taxonomy alignment.

Revenue

The denominator comprises total revenue and the numerator comprises Taxonomy-eligible revenue. Total revenue is the revenue of the various business areas combined (see Financial Statements 1. Consolidated Statement of profit or loss). The business areas have no revenue not covered by the Taxonomy-eligible description.

Taxonomy-eligible revenue is the portion of revenue from products or services, including intangible assets, related to Taxonomy-aligned economic activities.

CapEx

The denominator includes additions to tangible and intangible assets during the financial year, before depreciation, amortisation and any revaluations, including those arising from upward revaluations and impairments, for the relevant financial year and excluding changes in fair value. The denominator also includes additions to tangible and intangible assets resulting from business combinations.

The numerator includes the portion of CapEx for climate mitigation and adaptation of economic activities in accordance with Annex II to the Climate delegated act.

OpEx

The denominator comprises direct non-capitalised research and development costs, building refurbishment measures, short-term leases, maintenance and repair, and all other direct expenses related to the day-to-day maintenance of property, plant and equipment. Excluded expenses are overheads, raw materials, employees operating machinery, research management and project development, as well as electricity, fluids or reagents required to operate property, plants and equipment.

  • 1EU taxonomy for sustainable activities (europa.eu)
  • 2Sustainable use and protection of water and marine resources; Transition to a circular economy; Pollution prevention and control; Protection and restoration of biodiversity and ecosystems.
  • 3The selection protocol includes conditions to ensure that the revenue within the environmental activity is always represented by exemplary projects that are homogeneous in terms of their technical nature and together account for at least 15% of the population revenue. We have also made the required number of exemplary projects dependent on the share that the environmental activity represents in the total eligible revenue of the sector.
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