Under the EU Taxonomy, the Do No Significant Harm principle prevents an economic activity from being classified as environmentally sustainable if, while helping one environmental goal, it causes significant damage to any of the other five. It is set out in Article 17 of Regulation (EU) 2020/852 and applied through sector-specific technical screening criteria adopted by the European Commission.1EUR-Lex. Regulation (EU) 2020/852 An activity that fails DNSH against a single objective cannot be reported as taxonomy-aligned, no matter how strong its contribution elsewhere.
Where DNSH Sits in Taxonomy Alignment
DNSH is one of four conditions in Article 3 of the Taxonomy Regulation. To count as environmentally sustainable, an activity must substantially contribute to at least one of the six environmental objectives, do no significant harm to any of the others, comply with minimum social safeguards on human rights and labor standards, and meet the technical screening criteria the Commission has issued through delegated acts.1EUR-Lex. Regulation (EU) 2020/852
DNSH is the counterbalance to substantial contribution. A wind farm can cut emissions dramatically and still fail alignment if its construction degrades a protected habitat or pollutes nearby water. The regulation offers no mechanism to trade harm in one area against benefits in another.
The Six Environmental Objectives DNSH Applies To
An activity claiming substantial contribution to one objective must pass DNSH screening against the other five. The six objectives are:2European Commission. EU Taxonomy for Sustainable Activities
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
What Counts as Significant Harm
Article 17 defines significant harm objective by objective, and its assessments consider the full life cycle of the products and services the activity provides.1EUR-Lex. Regulation (EU) 2020/852
For climate change mitigation, harm means substantial greenhouse gas emissions. For adaptation, it means the activity increases adverse climate impacts on itself, on people, on nature, or on assets. Water and marine harm covers degradation of the ecological health of surface water, groundwater, or marine environments.
The circular economy definition is more detailed: harm occurs when an activity creates major inefficiencies in material use, significantly increases waste generation or disposal, or where long-term waste storage could cause lasting environmental damage. Pollution harm is triggered by a meaningful rise in emissions to air, water, or land compared with conditions before the activity. Biodiversity harm covers damage to ecosystem condition and resilience, or negative effects on the conservation status of habitats and species.3Knowledge for policy. Do No Significant Harm
Technical Screening Criteria: How DNSH Is Actually Tested
The Article 17 definitions are deliberately broad. The Technical Screening Criteria (TSC) translate them into concrete benchmarks activity by activity, sector by sector, adopted through Commission delegated acts.2European Commission. EU Taxonomy for Sustainable Activities What “significant harm” looks like for a cement plant is not what it looks like for a data center or a forestry operation, and the TSC set out the difference.
Some criteria are quantitative, such as an emissions cap per kilowatt-hour. Others are qualitative and require management plans for water protection or biodiversity conservation. The TSC also distinguish between the higher thresholds that apply when an activity claims substantial contribution to an objective and the DNSH thresholds that apply when the activity only needs to show it does not damage that objective. The DNSH criteria are typically less demanding, but they remain binding.
The EU Taxonomy Compass, hosted by the Commission, is the practical reference for identifying which criteria apply to which activity.4European Commission. EU Taxonomy Compass It is a lookup tool, not a submission portal.
Special DNSH Conditions for Nuclear and Natural Gas
A Complementary Delegated Act attaches specific DNSH-related conditions to nuclear energy and natural gas activities that go beyond the standard screening criteria.
Nuclear projects must demonstrate that the host member state has operational disposal facilities for low-level and intermediate-level radioactive waste, together with documented plans for a high-level waste disposal facility. From 2025, both existing and new nuclear projects must use accident-tolerant fuel certified by the national regulator.5International Trade Administration. EU Sustainable Finance Taxonomy Delegated Act – Nuclear Energy and Natural Gas
Natural gas power plants face emissions ceilings: life-cycle emissions below 100 grams of CO2 equivalent per kilowatt-hour, or, where renewables are not available at sufficient scale, direct emissions below 270 grams of CO2 equivalent per kilowatt-hour. As an alternative to the 270g threshold, annual direct emissions must stay below an average of 550 kilograms of CO2 equivalent per kilowatt of capacity over 20 years. Gas plants must also commit to switching to low-carbon fuels by 2035.6European Parliament. EU Taxonomy – Delegated Acts on Climate, and Nuclear and Gas
DNSH Under the Taxonomy Is Not the Same as DNSH Under SFDR
The phrase appears in two pieces of EU legislation, and the tests are not interchangeable. Under the Taxonomy Regulation, DNSH is assessed at the level of individual economic activities against the sector-specific TSC. Under the Sustainable Finance Disclosure Regulation (SFDR), DNSH applies to any investment a fund manager classifies as a “sustainable investment,” and the test uses Principal Adverse Impact (PAI) indicators rather than the TSC.7European Securities and Markets Authority. Note on DNSH Definitions and Criteria Across the EU Sustainable Finance Framework
PAI indicators for SFDR products include greenhouse gas emissions and intensity, exposure to fossil fuel companies, violations of the UN Global Compact and OECD Guidelines, and exposure to controversial weapons.8European Supervisory Authorities. Report on Principal Adverse Impact Disclosures Under the Sustainable Finance Disclosure Regulation Taxonomy-aligned investments that have already passed the TSC-based DNSH test automatically qualify as sustainable investments under SFDR. The reverse is not true: an investment a fund manager considers sustainable under SFDR does not automatically meet the taxonomy’s stricter, sector-specific standards.
One further boundary is worth flagging. Passing DNSH does not by itself make an activity taxonomy-aligned. The minimum safeguards test under Article 18, covering human rights due diligence, labor standards, anti-corruption, taxation, and fair competition, is a separate condition and can disqualify an activity that satisfies every environmental test. Exposure to controversial weapons is an automatic failure of that safeguard.9European Commission. Final Report on Minimum Safeguards
Evidence a DNSH Assessment Requires
Proving DNSH compliance means assembling documentation that maps directly to the TSC for each relevant activity. The specific evidence depends on the sector and the objectives at issue, but a few categories recur.
Life-Cycle Assessments
Article 17 calls for life-cycle evidence when evaluating significant harm. A life-cycle assessment tracks environmental impact from raw materials through manufacturing, use, and disposal, and it is central to demonstrating compliance with the circular economy criteria.
Climate Risk and Vulnerability Assessments
For the climate change adaptation objective, the Climate Delegated Act requires a structured climate risk and vulnerability assessment. That means identifying the expected lifespan of the activity, screening for climate hazards listed in the regulation’s appendices, and assessing both current and projected physical risks. Activities with an expected lifespan of ten years or more must evaluate future risks using climate projections rather than historical data alone. Where material risks are identified, the operator must implement adaptation solutions, either designed into new assets or delivered through a retrofit plan for existing ones within five years.
Chemical Usage Data and Environmental Impact Studies
DNSH criteria for pollution prevention often require evidence about chemical use through the supply chain. The Commission has acknowledged that the boundaries of supply chain obligations remain a practical difficulty for reporting companies. Assessments may also require environmental impact studies showing that a project does not degrade local ecosystems or water quality. Each step of the assessment should be documented to produce an audit trail.
How DNSH Shows Up in Reporting
Companies subject to taxonomy reporting must include their alignment figures in annual sustainability statements. The headline metrics are the proportion of turnover, capital expenditure, and operating expenditure associated with taxonomy-aligned activities.10European Commission. Questions and Answers on EU Taxonomy Simplifications to Cut Red Tape for Companies DNSH is where those figures are made or lost. If an activity fails DNSH against a single objective, its revenue cannot be counted as aligned, no matter how well the other conditions are met.
Within the disclosure itself, the DNSH assessment is reported as a binary yes or no for each environmental objective, while substantial contribution is reported as a percentage. Published sustainability disclosures are subject to independent third-party assurance. The Corporate Sustainability Reporting Directive does not set penalty amounts; enforcement rests with each member state, which must ensure penalties are “effective, proportionate, and dissuasive.” Consequences can extend beyond fines to exclusion from public procurement and loss of standing with institutional investors who rely on taxonomy data.