Grandfathering in brief
Grandfathering currently has two main approaches, depending on whether the issuer chooses to use gradual allocation or portfolio allocation. For simplicity, we assume below the majority of corporates would opt for gradual allocation, while FIG (financial institutions group) issuers and the majority of real estate issuers would work with portfolio allocation.
- Corporate issuers, after a relevant amendment to the EU Taxonomy’s technical screening criteria, should ensure that they allocate i) any unallocated proceeds and/or ii) proceeds covered by a capex plan within seven years from the relevant amendment to technical screening criteria.
- FIG issuers should ensure that, when they report on annual allocation, the reporting (and allocation) should only include such assets that are aligned with the EU Taxonomy’s technical screening criteria from the past seven-year period.