6. Comparative analysis of the two sectors

For the comparative analysis between the two sectors, a SWOT analysis has been employed as the framework. The interpretations of strengths, weaknesses, opportunities, and threats are derived from the interviews, with each category reflecting the sector's current position (as of 2024) in relation to understanding and applying the Taxonomy. Additionally, the analysis considers what can be expected in the future as the market and the Taxonomy evolve. The key points are summarized in Tables 1-4 below. It should be noted, that the SWOT analysis is based on qualitative findings of knowledge from the 15 companies included in this study, and that it cannot be seen as representative for the construction or forestry sector at large. The comparative analysis thereby presents examples of factors that could be considered strengths, weaknesses, opportunities, and threats for EU Taxonomy implementation in the two sectors.

Strengths expressed by companies in both the forestry and construction sector include strong cooperation within business federations, while the construction sector also benefits from collaboration within the Green Building Council. Both sectors have embedded sustainability at the core of their organisations, are accustomed to reporting and certification practices, and have long applied climate adaptation and mitigation measures. This experience makes them well-prepared to handle Taxonomy-related reporting and communication.

Regarding weaknesses, the construction sector has expressed there are challenges to meet the "Do No Significant Harm" (DNSH) criteria for environmental objective 6. The lack of clear guidance from national authorities on how to interpret and comply with Taxonomy requirements further complicates their efforts. Additionally, the construction sector has expressed concern that the Nordic interpretation of the Taxonomy could be stricter than in other member states. None of the sectors find Taxonomy alignment as a competitive advantage yet. Both sectors have numerous small stakeholders along the value chain and complex company structures which makes it difficult to report accurately throughout the value chain.

Opportunities identified include a high demand for forest products with little competition, which positions the forestry sector favourably. Both sectors could benefit from common Nordic guidelines and improved cooperation across departments. Furthermore, the taxonomy provides a framework that helps companies map and prioritise what sustainability measures are needed to improve their operations. There is also a growing focus on building in-house competence, and the sectors are ready to adapt to future demand for Taxonomy-aligned projects. Green bonds are noted as a potential future impact.

Threats for the forest sector specifically include the perception that business-as-usual activities are more ambitious than what the Taxonomy criteria demand. The construction sector is still considered to be in an economic recession, which limits its ability to prioritize sustainability efforts outside of normal practice, because efforts require investments in the projects beyond business-as-usual, which is more restricted during economic recessions. However, this is only speculations on future drivers, since there are no requirements yet on EU Taxonomy alignment but only on reporting, which therefore not force neither the investors nor the companies to invest further for increased alignment. Nevertheless, this may change over time, if requirements for alignment are enforced. Both sectors face low interest from investors and customers, which could lead to falling behind if these criteria become critical for investments. Additionally, differences in production methods across the EU and the ambitious nature of the Taxonomy criteria make it difficult for companies to interpret and apply these standards effectively.

The analysis has been summarised in four tables below (table 1–4), divided into strengths, weaknesses, opportunities and threats. All of the conclusions in the SWOT analysis are solely based on the interviewed companies´ views of the Taxonomy.

Table 1 SWOT analysis of the forest and construction sector. This table presents the strengths.

Strength (S)	S for both sectors	S for forest	S for construction
	Companies are used to reporting schemes	Cooperation in business federations	Cooperation in business federations and Green Building Council
	Companies are used to certification schemes	Rising trends in the market indicate increased investment in forests as part of companies' opportunities to act	Taxonomy has put sustainability at heart of the organization
	Companies from both sectors are knowledgeable within sustainability topics and are able to use this in a Taxonomy context in terms of reporting and communication		The sector is well aligned with Environmental objective 1 and 2
	Climate adaptation and mitigation measures have been applied in both sectors for a long time, and the companies are used to working with this topic
	The taxonomy is to a large extent integrated into other reporting workflows, including the SFDR and CSRD, and in relation to value chain information and third-party verification.

Table 2 SWOT analysis of the forest and construction sector. This table presents the weaknesses.

Weaknesses (W)	W for both sectors	W for forest	W for construction
	For the sector representatives, Taxonomy alignment is not perceived as a competition advantage on the market	Uncertainties in documenting DNSH criteria for Environmental objective 6	Difficult to live up to and document DNSH criteria for Environmental objective 6
	The Taxonomy criteria are interpreted differently within each sector, leading to unclear reporting and missing standardisation	Many small stakeholders on the market	Perception that Nordic countries interpret the Taxonomy more strict
		Limited resources for reporting	Investments and innovation needed for further Taxonomy alignment with environmental objective 3-6, to prepare for potential increased market pressure
		Company structure makes it Difficult to report throughout the value chain	Many stakeholders throughout the value chain which makes it hard to get data for the reporting

Table 3 SWOT analysis of the forest and construction sector. This table presents the opportunities.

Opportunities (O)	O for both sectors	O for forest	O for construction
	The Taxonomy has improved cooperation across departments		The Taxonomy helps the companies map and understand what sustainability measures are necessary to focus on
	Green bonds could have more impact on Taxonomy alignment in the future		Wish for common Nordic guidelines for increased uniformity in reporting standards
	Focus to build competence inhouse
	When there is a demand and willingness to pay for Taxonomy aligned projects, the sector is ready to make the necessary changes to align to a larger extent with the Taxonomy

Table 4 SWOT analysis of the forest and construction sector. This table presents the threats.

Threats (T)	T for both sectors	T for forest	T for construction
	There is a wish for further guidance on how to interpret and fulfil the Taxonomy requirements	Business-as-usual activities are seen as more ambitious than the Taxonomy criteria	The Taxonomy criteria is more ambitious than business-as-usual
	Still low interest on Taxonomy-criteria from investors and customers, risk of sector/companies falling behind if/when the Taxonomy will be seen as an investment criterion	Different production methods throughout the EU, which will affect Taxonomy-interpretation and development	The sector has been and is still considered to be in an economic recession
	Difficult for the companies to interpret the Taxonomy criteria	Nordic forestry sector finds discrepancies in how the Taxonomy criteria define sustainability and how the sector works today.	The EU taxonomy focuses on what is best practice, need more guidance on what is good and bad. Big gap between what the industry does today and best practice according to the Taxonomy