Do No Significant Harm

The DNSH criterion (Do No Significant Harm) is a central building block of the EU Taxonomy Regulation (Regulation (EU) 2020/852). An economic activity only qualifies as environmentally sustainable if it makes a substantial contribution to at least one of the six environmental objectives while at the same time not significantly harming any of the others. In this way, the EU Taxonomy prevents a contribution to climate change mitigation from being achieved at the cost of serious damage elsewhere – for example to water, biodiversity or the circular economy.

The six environmental objectives of the EU Taxonomy are: climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems. For every activity covered by the delegated acts, the DNSH requirements are set out in concrete technical screening criteria – ranging from climate risk assessments and emission limits to water consumption thresholds and requirements for waste avoidance and freedom from harmful substances.

In addition to the DNSH criteria, an activity must also comply with the so-called Minimum Safeguards, including the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. The DNSH criterion is highly relevant in practice because the taxonomy alignment of turnover, capital expenditure (CapEx) and operating expenditure (OpEx) must be disclosed as part of CSRD reporting. Without documented DNSH evidence, an activity may be taxonomy-eligible but not taxonomy-aligned.