EU Taxonomy

In 2020, the EU Taxonomy entered into force. The EU Taxonomy was part of the EU Green Deal, Europe’s strategy to become the first climate-neutral continent in 2050. The EU Taxonomy serves as a classification system summarising what activities are and are not considered ecologically sustainable. For information on the content of the Taxonomy, please see the website of the European Union: EU taxonomy for sustainable activities - European Commission (europa.eu).

Heijmans falls within the scope of the EU Taxonomy. In the year under review, the EU Taxonomy required us to examine which part of our revenue/CapEx/OpEx is eligible for the Taxonomy for all six environmental objectives stated in the EU Taxonomy. Furthermore, for the environmental objectives climate change mitigation and climate change adaptation, the EU Taxonomy required us to assess which part is actually aligned with the criteria listed in the legislation.

The eligibility and alignment assessment largely followed the process set up last year. Last year we took a major step in the transfer of responsibilities for collecting evidence from centrally managed officers to knowledge carriers within the various sectors, thus promoting the involvement of the sectors in the EU Taxonomy and securing Taxonomy knowledge within the organisation close to projects.

Activities that are eligible for the EU Taxonomy:

In the analysis related to the eligibility of the business activities, Heijmans used the currently available EU documents that contain the definitions and clarifications for non-financial companies:

• The Climate Delegated Act published in the Official Journal on 9 December 2021 and applicable since January 2022.

• The Complementary Climate Delegated Act published in the Official Journal on 15 July 2022 and applicable since January 2023.

• The Environmental Delegated Act published in the Official Journal on 21 November 2023 and to apply as of January 2024.

• The amendments to the Climate Delegated Act published in the Official Journal on 21 November 2023 and to apply as of January 2024.

From the descriptions of activities in the ISO9001 and ISO14001 certificates of the various business areas, we made the most granular possible breakdown of the business activities (e.g. distinction between construction of infrastructure for rail traffic, road traffic, water traffic, etc.), and then mirrored these against the descriptions of the Taxonomy activities.

In the year under review, for the first time we made an assessment of whether the cited business activities warrant being mirrored against the Taxonomy in the environmental objectives sustainable use of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. The conclusion of this assessment was that Heijmans develops business activities that can be mirrored against these environmental objectives. However, from a business strategy perspective, we felt it was appropriate to classify the last year’s revenue from business activities in the environmental activities of the Taxonomy environmental objectives mitigation of climate change and adaptation of climate change. Every year, the strategy is re-mirrored against the environmental activities described within the Taxonomy, and we assess whether or not revenue will be allocated to environmental objectives other than climate change mitigation and climate change adaptation.

In assessing revenue in terms of its eligibility, Van Wanrooij’s revenue was included as of the acquisition date. Van Wanrooij’s eligible revenue was also allocated to environmental activities.

 TAXO1 - eligible activities linked to business areas

For each of the Group’s sectors, we placed the revenue at project level in one of the set environmental activities, based on the description and content of the project in question. We have excluded inter-company revenue to prevent revenue from being counted twice. At the same time, we assessed revenue at project level for (non-)eligibility directly. We identified the revenue that is non-eligible on the basis of the nature of the project. This pertains to revenue in non-carbon-free air-side airport infrastructure, maintenance on take-off and landing runways, electrical installations for road infrastructure, but also revenue in telecoms and activities at clients in the petrochemical industry.

The eligibility analysis revealed that 90.9% of Heijmans’ revenue is eligible, and 9.1% of the revenue is non-eligible. This values are in line with the percentages achieved in the previous reporting year.

Because Heijmans cannot yet assign all investments or operational costs to specific projects or activities, the CapEx and OpEx have been assigned on a pro rata basis. See the next section for an explanation.

Burden of proof EU Taxonomy alignment

Revenue

Heijmans has chosen not to prove alignment for all set environmental activities. A number of activities have insufficient overlap between the internal project administration (and/or at our clients) and the burden of proof required by the Taxonomy. For other environmental activities, the revenue is so limited that establishing the alignment of these activities does not have an impact on Heijmans’ total alignment score. We have recognised the revenue from activities for which there is as yet no burden of proof or this burden of proof has not yet been evaluated as non-aligned revenue. As we decided to not yet conduct an assessment of the alignment potential of Van Wanrooij’s revenue in the acquisition year, this revenue has also been recognised as non-aligned.

For the reporting year 2023, we once again chose to limit the alignment analysis to two large revenue-generating business activities. These are the activities ‘7.1 Construction of new buildings’ and ‘6.15 Road traffic and public transport infrastructure’. Together, these two activities represent roughly 55% of Heijmans’ total revenue.

For the environmental activity ‘6.15 Road traffic and public transport infrastructure’, we assessed individual projects for alignment. For the environmental activity ‘7.1 Construction of new buildings’, we assessed alignment using example projects. We determined the minimum number of example projects required on the basis of a selection protocol[1].

The alignment percentage resulting from the assessed example projects was then extrapolated to the set of similar projects within the business area and the relevant Taxonomy environmental activity.

We based the burden of proof as much as possible on internally available documents. For some criteria, Heijmans has no choice but to rely on policy documents that lie outside its own operational control. For these criteria, Heijmans has shifted the burden of proof to the client:

Identifying relevant climate risks and determining corresponding adaptation solutions, as this can only be done effectively during the initiative and design process of projects.

Water management plans and ecological surveys are part of the procedural requirements leading to zoning plans and environmental permits, normally as part of an environmental impact assessment. The aforementioned plans and studies are carried out by or on behalf of the client.

For the environmental activities for which no (example) projects have been assessed, we have assumed non-alignment. In the coming years, Heijmans will work to expand its own information gathering systems at project and group level, as well as information requests to clients with a view to improved Taxonomy reporting. The aim is to achieve a complete overview and understanding of Taxonomy alignment for each individual project.

To this end, due to the growing share of eligible revenue, as well as their importance in the business strategy, Heijmans is aiming first for alignment in the environmental activities ‘4.9 Transmission and distribution of electricity’ and ‘7.2 Renovation of existing buildings’. We conducted an analysis of the feasibility of the criteria associated with these environmental activities in 2023. This analysis showed that we need to adjust internal processes before alignment is assessed and achieved. For 2023, revenue in these two environmental activities was still recognised as non-aligned.

CapEx

Total CapEx (the denominator) consists of the sum of the additions to property, plant and equipment and intangible fixed assets (see Financial statements 6.10 Property, plant and equipment and 6.12 Intangible fixed assets) and the additions to leased rights-of-use assets (see Financial statements 6.11 Leases). Following the deduction of overheads, we determined per addition for which Group sector and which environmental activities this CapEx will be used.

We divided the CapEx into two categories:

• Investments related to a plan to develop activities that are aligned with the Taxonomy. In 2023, we spent approximately € 11.8 million in this category, which related to investments in the timber frame production facility in Heerenveen and the HeZon energy supply in Amersfoort.

• Investments that do not fall under the previous category. We determined per addition for which of the Group’s sectors this CapEx will be used. The relevant CapEx has been qualified as eligible (the numerator) insofar as the activities of the relevant sectors are eligible for the taxonomy. These additions were subsequently qualified as aligned with the Taxonomy, in proportion to the degree to which the relevant revenue has been qualified as aligned with the Taxonomy.

OpEx

Total OpEx (the denominator) consists primarily of the following items:

• Short-term leases (see Financial statements 6.11 Leases)

• Research and development costs (see Financial statements 6.5 Personnel expenses, depreciation and research and development costs)

OpEx also includes costs related to maintenance and repairs and all other direct expenses related to the day-to-day maintenance of property, plant and equipment by Heijmans or by third parties to whom we outsource activities required for the continuous and effective operation of such assets.

We determined which costs were incurred for which sectors. Insofar as the activities of the sectors in question were eligible for the Taxonomy and did not pertain to indirect activities, the related OpEx (the numerator) was also qualified as eligible. This OpEx was subsequently qualified as aligned with the Taxonomy, in proportion to the degree to which the relevant revenue is qualified as aligned.

Minimum Social Safeguards

For the accounting of the Minimum Social Safeguards, please see the summary in section 8.4 Quality of the organisation of this annual report, as well as the Human Rights Appendix in this annual report.

Conclusions Taxonomy analysis

Revenue

The total revenue to be assessed in the Taxonomy consists of revenue from projects for third parties from the Group’s various sectors, including revenue obtained from joint operations (see Financial Statements 1. Consolidated statement of profit or loss).

For the reporting year 2023, Heijmans decided to limit the alignment reporting to two major revenue-generating business activities. These are the activities ‘7.1 Construction of new buildings’ and ‘6.15 Road and public transport infrastructure’. Together, these two activities represent 55% of Heijmans’ total revenue. The share of revenue from these activities that is aligned with the Taxonomy is shown in table TAXO3 under A.1.

We have seen a slight growth in alignment in both activities. In the environmental activity ‘7.1 Construction of new buildings’, growth can be seen both in the projects developed at our own risk (Property Development sector) and also in the projects we build for professional clients (Building & Technology sector).

The table shows Van Wanrooij’s revenue from the date of acquisition. Without this revenue, the alignment percentage would have increased to 19.8% in 2023 from 17.1% in 2022.

The other activities are included in table TAXO3 under A.2. We chose to label all revenue from these environmental activities as non-aligned in the year under review. Table TAXO3 under A.2 also includes the non-aligned revenue from the environmental activities ‘7.1 Construction of new buildings’ and ‘6.15 Road traffic and public transport infrastructure’.

CapEx

Total CapEx consists of the sum of additions to property, plant and equipment and intangible fixed assets (see financial statements 6.10 Property, plant and equipment and 6.12 Intangible fixed assets) and additions to rights-of-use leased assets (see financial statements 6.11 Leases). Table TAX04 below shows the result.

The table includes in the numerator of Van Wanrooij’s CapEx from the date of acquisition. Without Van Wanrooij, the alignment rate would have increased to 38.3% in 2023 from 33.5% in 2022.

OpEx

Total OpEx consists primarily of the items short-term leases (see financial statements 6.11 Leases) and research and development costs (see financial statements 6.5 Personnel expenses, depreciation and research and development costs). OpEx also includes costs for maintenance and repair, as well as all other direct expenses related to the day-to-day maintenance of property, plant and equipment by Heijmans. OpEx also includes the costs of third parties to which Heijmans outsources activities required for the continuous and efficient operation of such assets.
Table TAX05 below shows the result. In the table, the numerator includes Van Wanrooij’s OpEx from the date of acquisition. Without Van Wanrooij, the alignment rate would have increased to 11.9% in 2023 from 10.5% in 2022.

Accounting policy

The KPIs revenue/CapEx/OpEx have been calculated in line with the requirements of Art. 8 of the EU Taxonomy legislation for the financial year 2023 (01/01/2023 - 31/12/2023). The tables are designed in line with the requirements in Delegated Regulation (EU) 2023/2486. The percentages in column 18 (proportion of taxonomy-aligned (A.1.) or eligible (A.2.) revenue/CapEx/OpEx 2022) have been adjusted to the requirements in the Regulation to facilitate a correct comparison of the 2022 and 2023 results.

CapEx and OpEx can be labelled as aligned in three ways. Heijmans’ aligned CapEx/OpEx refers, on the one hand, to assets or processes related to taxonomy-aligned economic activities and, on the other hand, to the purchase of outputs from taxonomy-aligned economic activities and with individual measures that enable the target activities to decarbonise or lead to reductions in greenhouse gas emissions. For a description of how Heijmans determined the eligibility and alignment of CapEx and OpEx, see section Burden of proof EU Taxonomy alignment.

Revenue

The denominator comprises total revenue and the numerator comprises Taxonomy-eligible revenue. Total revenue is the revenue as shown in the consolidated statement of profit or loss (Financial statements 1.). Consolidated revenue includes Van Wanrooij’s revenue from the date of acquisition. The business areas have no revenue that does not fall within the description of the Taxonomy.
Taxonomy-eligible revenue is the portion of revenue from products or services related to Taxonomy-aligned economic activities.

CapEx

The denominator includes additions to property, plant and equipment and intangible fixed assets in the course of the financial year, before depreciation, amortisation and any revaluations, including those arising from upward revaluations and impairments, for the relevant financial year and excluding changes in fair value. The denominator also includes additions to property, plant and equipment and intangible fixed assets resulting from business combinations.

The denominator includes additions to property, plant and equipment and intangible fixed assets of Van Wanrooij from the moment of the acquisition.

The numerator includes the portion of CapEx for climate mitigation and adaptation of economic activities in accordance with Annex II to the Climate delegated act.

OpEx

The denominator comprises direct non-capitalised research and development costs, building refurbishment measures, short-term leases, maintenance and repair, and all other direct expenses related to the day-to-day maintenance of property, plant and equipment. Excluded expenses are overheads, raw materials, employees operating machinery, research management and project development, as well as electricity, fluids or reagents required to operate property, plants and equipment.
The numerator includes the capitalised costs of Van Wanrooij from the moment of the acquisition.

• 1The selection protocol includes conditions to ensure that the revenue within the environmental activity is always represented by example projects that are homogeneous in terms of their technical nature and together account for at least 15% of the population revenue. We have also made the required number of example projects dependent on the share that the environmental activity represents in the total eligible revenue of the sector.