The Importance of EU Taxonomy for Sustainable Development Reporting. Case Study of Entities Listed on the Warsaw Stock Exchange in Poland

Abstract

Abstract The introduction of the obligation to prepare ESG reports taking into account EU Taxonomy is a challenge for enterprises, but at the same time opens up the possibility of using disclosures in this area to assess entities in the context of environmentally sustainable activities. Legal changes in the field of the Green Deal have been introduced in the last three years, and in the area of EU taxonomy this process is still ongoing, resulting in a deficit of research on the effects of implementing the new legal regulations. The main goal of our study is to assess the importance of the newly applicable ESG reporting and environmental disclosure requirements under EU Taxonomy in improving the quality and comparability of sustainability reporting and the creation of ESG ratings. A qualitative research method was applied based on multiple case studies using content analysis on the basis of ESG reports for 2021-2022 for entities listed on the Warsaw Stock Exchange. The research results indicate a very low level of activities classified as environmentally sustainable and taxonomy-aligned. Additionally, the results may also indicate problems with implementing the new solutions in reporting practice. At the same time, a positive impact is noted of the implementation of taxonomic reports on improving the comparability and detail of disclosures.