This report examines how companies in the forestry and construction sectors in Norway, Sweden, and Finland have responded to the EU taxonomy Regulation during its early implementation period. The analysis provides a comprehensive view of the current market state in both sectors, highlighting key barriers and opportunities that companies face in aligning with the Taxonomy. The findings reveal commonalities and differences between the two sectors, particularly in their approach to sustainability impacts, organizational changes, knowledge building, preparatory work, and cross-Nordic challenges and advantages.
Key findings from the comparative analysis indicate that both sectors have strengthened cooperation, both internally as well as along the value chain. Both sectors also have substantial experience in sustainability reporting. Certification schemes used for sustainability reporting in both sectors are seen as a helping tool when scrutinising the Taxonomy criteria. Climate adaptation and mitigation measures have also been applied in both sectors for a long time, and the companies are used to working with this topic. Furthermore, neither of the sectors perceive Taxonomy alignment as a competitive advantage yet.
The analysis also highlights differences in how each sector experiences its challenges. The construction sector, for example, is still coping with the current economic recession, which hampers incentives for project investors to invest in sustainability measures beyond business-as-usual practices. These kinds of investments are necessary for the industry to improve alignment beyond the climate objectives stated in the Taxonomy. The sector also finds the Taxonomy criteria more ambitious than current business practices, which again requires additional resources and investments in order to realise in practice. In contrast, the forest sector considers the Taxonomy criteria less ambitious than the sustainability measures already in place in the Nordics and faces challenges with the Taxonomy’s adaptation to Nordic forestry practices.
Overall, the Taxonomy has played a significant role in advancing the EU's sustainability goals. However, the lack of streamlined guidelines and clear interpretations limits its potential impact. To realise the full potential of a shift toward sustainability in both sectors, further investments in green technology, innovative business models, and increased participation from investors and consumers are essential to drive demand for sustainable solutions. The insights gained from this analysis have informed a set of policy recommendations aimed at creating a supportive policy landscape in the Nordics, which can enhance the Taxonomy's impact on sustainability efforts and sector priorities. The recommendations are:
Study the synergies between certification schemes and the EU taxonomy regulation.
Clarify the interplay between national regulation and the EU taxonomy regulation.
Promote more research on the effects of the Taxonomy.
Investigate the spread of significant contributions among companies.
Promote funding and investment for further Taxonomy-alignment with the environmental objectives.
The analysis is based on a literature review and interviews with selected companies in both sectors across the three countries. The literature review provided critical insights into how Nordic companies engage with and implement the Taxonomy Regulation in practice. The interviews offered a deeper understanding of the barriers and opportunities companies are facing when understanding, implementing, building knowledge inhouse and aligning with Taxonomy criteria. Since the EU Taxonomy Regulation still is in its infancy, companies and industries are learning and adopting step by step to align company practices and reporting standards to live up to the reporting criteria from the EU Commission. The interviews gave insight into how the different sectors are coping and how implementation and practice is evolving. Findings from the interviews have also been outlined in a comparative SWOT analysis between the two sectors.