Application of the DNHS principle to obtain Next Generation Funds

Organizations that want to access the money Next_Generation They must review all aspects and requirements related to compliance with the required environmental and sustainable performance objectives. Among them, they will have to demonstrate that the investments susceptible do not cause significant harm (DNSH) to various environmental objectives. The EU Commission and the Member States have firmly committed to a more sustainable European Union at all levels. To this end, a series of initiatives have been established, among which the new Taxonomy Regulation stands out. This regulation establishes the criteria to determine if an economic activity is considered environmentally sustainable with respect to six environmental objectives: climate change mitigation; adaptation to climate change; sustainable use and protection of water and marine resources; transition to a circular economy; prevention and control of pollution and, finally, protection and restoration of biodiversity and ecosystems. The objective of the new regulation is to offer uniformity and transparency regarding the degree of environmental sustainability of EU companies.


Said regulation establishes that all organizations that are obliged to present non-financial information must report, among others, that their economic activities cause no significant harm (DNSH) to the six objectives mentioned. Specifically, in 2022 companies will begin to report on the objectives mitigation of climate change and adaptation of climate change in accordance with the delegated act of June 4, 2021. In short, an economic activity is considered to cause significant harm when for each objective: It gives rise to considerable greenhouse gas emissions . Cause an increase in the adverse effects of current and predicted future weather conditions. Go to the detriment of the good condition and ecological potential of the masses of surface water, groundwater or marine waters. Generate significant inefficiencies in the use of materials or natural resources or lead to a significant increase in waste management or the disposal of these may cause significant damage to the environment. Give rise to an increase in polluting emissions into the atmosphere, water or soil Is detrimental to good conditions, the state of conservation of habitats and species and the resilience of ecosystems. These six criteria of the Taxonomy Regulation are the ones adopted by the money Next_Generation to guarantee that the reforms and investments that derive from them do not cause significant harm to the environment. On the other hand, Member States do not have the obligation to refer to the criteria of the Taxonomy Regulation, but have the option to rely on them to assess compliance with the DNSH principle.
In short, the criteria proposed by the Taxonomy Regulation seek to create a solid and scientific basis with which to demonstrate that no significant damage is caused to the environment.

How do the DNSH criteria work?

The DNSH criteria established by the Taxonomy Regulation were designed under the condition of maintaining the legal minimums established by the European Union and the Member States in environmental matters. However, when the expected environmental impact is significant in an economic activity, but there are no specific requirements by current legislation, the Commission’s group of experts then develops a specific criterion. As an example, where a given activity presents a risk of causing significant harm only to the circular transition and biodiversity objectives, the DNSH criteria will only be necessary for those two objectives; notwithstanding that said activity complies with the minimum legally established by the European Union and the Member States for the remaining four objectives. Currently, the Taxonomy Regulation has developed the DNSH principles for economic activities that contribute substantially to the objectives of climate change mitigation and adaptation to climate change, and the final version of the remaining 4 is under development. European regulations on this matter are extensive and complex, which is why at Globalcaja we offer you our Public Aid Technical Office, a new service with high added value with which we seek to help companies throughout the entire process. of identification, request, preparation of the file and subsequent justification of regional, national and European aid. INFORMATIONTitleApplication of the DNHS principle to obtain Next Generation FundsDescriptionThe organizations that want to access the Next_Generation funds must review all the aspects and requirements related to compliance with the required environmental and sustainable performance objectives. Author GLOBALCAJA

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