This study has examined the uptake of the EU Taxonomy among 15 companies in the forestry and construction sectors in Finland, Sweden and Norway, providing suggestive findings and examples of the implementation in both sectors. The implementation of the EU Taxonomy for companies in the construction sector has been a significant step towards defining sustainability in a uniform way. However, the Taxonomy have proven to leave room for quite extensive interpretation challenges among companies in both sectors. Both in terms of definitions and how to disclose information along the value chain. As such, actors along the value chain are becoming more codependent, which can be a strength to reduce climate impact in the long run, but also cause implications for data gathering and reporting.
For companies in the forest sector, the Taxonomy has increased focus on how to interpret and define sustainable forest management practices, which differs across the EU. However, the current gaps in the Taxonomy's sectoral coverage—such as the exclusion of the paper pulp industry—indicate that there may be a need for the Taxonomy to expand over time to include more sectors, especially those closely related to already covered industries. Doing so would help create a more comprehensive and coherent framework, reducing the discrepancies in reporting and providing clearer guidance across entire value chains.
In the construction sector, the EU taxonomy has fostered a greater focus on sustainable building practices, energy efficiency, circular economy principles and protection and restoration of biodiversity. However, especially two main challenges have been raised by companies in the sector, which regards the choice of materials and the DNSH criteria for environmental objective six, which is about protection and restoration of biodiversity. The historical work on sustainability within the construction sector, largely within climate mitigation and adaptation measures, has led to innovations in both design and materials. However, the sector still faces obstacles, e.g., exploitation of land and high demand for land use as well as the high costs of innovation and the need for transition within the sector. The detailed classification of the economic activity criteria has also raised concerns within the sector on the need for transition and the need for innovation and investments to realise it.
Although the implementation of the EU taxonomy among companies in the construction sector marks a pivotal shift towards sustainability, the market still depends on increased investments and a corresponding rise in market demand to realise its potential for sustainable practices. For the Taxonomy standards to be truly effective, significant financial resources are needed to support the development and adoption of green technologies and business models, as well as to scale sustainable practices across the forestry and construction industries. Ultimately, the success of the EU taxonomy will depend not only on regulatory compliance and harmonisation across member states, but also on active participation and changed behaviour among investors and businesses in driving the demand for sustainable solutions. As investments and market demand for taxonomy related activities increases, the standards set by the Taxonomy can become more deeply embedded in industry practices.
Looking ahead, the outlook for implementation of the EU taxonomy in these sectors is optimistic but still somewhat uncertain. The regulation is expected to become more robust as it evolves, with potential expansions to cover more sectors, specific activities and additional guidance to address sector-specific challenges. Continued dialogue between regulators, industry stakeholders, and financial institutions will be crucial to refine the Taxonomy and make it more practical for diverse business environments. Additionally, the Taxonomy’s role in guiding sustainable investments is likely to grow, further embedding sustainability into the strategic planning of companies within the two sectors.