Chapter 08 · Finance, data & evidenceSustainable Finance & Investment
CapEx alignment (EU Taxonomy)
Definition
One of the three key performance indicators (turnover, capital expenditure, operating expenditure) that non-financial undertakings must disclose under Article 8 of the EU Taxonomy Regulation. The CapEx KPI is the proportion of capital expenditure that is associated with taxonomy-aligned activities, with a credible CapEx plan to expand alignment (typically within five years), or with individual measures meeting the technical screening criteria.
References
Three Article 8 KPIs; CapEx numerator categories (aligned activity, CapEx plan to become aligned within five years, individual measures); CapEx as often the highest KPI.
Denominator definition (additions to tangible/intangible assets before depreciation; Disclosures Delegated Act Annex I, IFRS categories).
Overview
What it means
CapEx alignment is where transition plans become auditable: turnover shows today's business; CapEx shows tomorrow's. A company can report modest green revenue yet demonstrate transformation through a credible aligned-CapEx plan — the KPI explicitly counts investment intended to become aligned within the plan horizon.
The denominator follows the Disclosures Delegated Act's Annex I definitions (additions to tangible and intangible assets before depreciation, per IFRS categories). In practice the CapEx KPI is often the highest of the three, and the most scrutinised by investors and banks applying the Green Asset Ratio.
How it is used
Companies construct CapEx plans and calculate the KPI within CSRD reporting; banks and investors use aligned-CapEx shares to classify counterparties, price transition finance and test net-zero credibility.
Why it matters
Transition claims live or die in capital budgets; the CapEx KPI makes "we are investing in the transition" a verifiable, comparable number rather than a narrative.