EU Taxonomy

Introduction to the EU Taxonomy Regulation

The EU Taxonomy Regulation entered into force on July 12, 2020 and establishes the general framework for determining whether an economic activity qualifies as environmentally sustainable for the purposes of establishing the degree to which an investment is environmentally sustainable. The EU taxonomy framework will develop over time.

Article 9 of the EU Taxonomy Regulation identifies six environmental objectives:

(1) climate change mitigation;

(2) climate change adaptation;

(3) the sustainable use and protection of water and marine resources;

(4) the transition to a circular economy

(5) pollution prevention and control; and

(6) the protection and restoration of biodiversity and ecosystems.
The EU Commission has adopted a catalogue of economic activities that can be taken into account for these objectives.

On April 21, 2021, the EU Commission adopted the Commission Delegated Regulation (EU) 2021/2139 of June 4, 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives (the Climate Delegated Act), which became effective in January 2022.

The EU Commission further adopted the Commission Delegated Regulation (EU) 2021/2178 of July 6, 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation (the Article 8 CDR), which also became effective in January 2022.

On March 9, 2022, the EU Commission adopted a complementary climate delegated act including, under strict conditions, specific nuclear and gas energy activities in the list of economic activities covered by the EU taxonomy. It was published in the Official Journal on July 15, 2022 and became effective in January 2023.

On June, 27 2023, the Commission adopted final delegated acts, supporting the EU Taxonomy Regulation. This includes Delegated Regulation (EU) 2023/2486 of June 27, 2023 (the Environmental Delegated Act). These delegated acts updates to the mandatory reporting templates, set out technical screening criteria for additional activities for the first two environmental objectives; climate change adaptation and climate change mitigation. These delegated acts also introduce technical screening criteria and relating reporting obligations for activities pursuing the remaining four environmental objectives; (i) sustainable use and protection of water and marine resources, (ii) transition to a circular economy, (iii) pollution prevention and control, and (iv) protection and restoration of biodiversity and ecosystems (together with the first two environmental objectives, hereinafter referred to as the Taxonomy Environmental Objectives). These delegated acts were published in the Official Journal on November, 21 2023 and apply as of January 1, 2024 for annual reporting periods occurring in 2023. As such, these requirements have been taken into account in this annual report.

In this section we present our compliance with the EU Taxonomy Regulation, the Climate Delegated Act, the Environmental Delegated Act, the Article 8 CDR and ancillary legislation currently applicable to us (the EU Taxonomy Legal Framework).

Compliance with the EU Taxonomy Regulation

In 2023 we performed a reassessment of all potential taxonomy-eligible economic activities, including all Taxonomy Environmental Objectives, listed in the Climate Delegated Act and the Environmental Delegated Act, based on our activities as a biopharmaceutical group for the current year’s activity. The Climate Delegated Act focuses on those economic activities and sectors that have the greatest potential to achieve the Taxonomy Environmental Objectives. The sectors covered include energy, selected manufacturing activities, transport and buildings. Our assessment methodology for 2023 is listed below and is based on the EU Taxonomy Legal Framework applicable as of January 1, 2024.

Companies are required to identify if their activities are eligible under the EU Taxonomy Regulation. On the basis of Commission Delegated Regulation (EU) 2023/137 amending Regulation (EC) No 1893/2006 of the European Parliament and of the Council establishing the statistical classification of economic activities NACE Revision 2, our main activities are:

• NACE 72.10 – Research and experimental development on natural sciences and engineering. According to the Dutch national transposition of the NACE code, the more specific level of the NACE code for our main activity is NACE 72.11 – Research and experimental development on biotechnology; and
• NACE 46.46 – Wholesale of pharmaceutical and medical goods. Our assessment of taxonomy-eligibility is focused on economic activities, defined as the provision of goods or services on a market, thus (potentially) generating revenues.

In this context, we, as a commercial-stage biopharmaceutical group, define the research and development and marketing of pharmaceutical products and wholesale thereof as the core of our business activities. We define activities such as the manufacturing or the transport of our pharmaceutical products to our clients as underlying activities necessary to conduct our core business activities. All of the activities mentioned in this paragraph will hereinafter be referred to as the argenx Activities.

Following a thorough analysis of the EU Taxonomy Legal Framework, we do not consider the argenx Activities to be in scope of the Climate Delegated Act or the Environmental Delegated Act. We have concluded that the argenx Activities qualify as EU Taxonomy non-eligible economic activities and that they do not substantially contribute to any of the Taxonomy Environmental Objectives.

Future EU Taxonomy disclosures

We are committed to the continued and ongoing assessment of our taxonomy eligibility on an annual basis and note that the required disclosures under the EU Taxonomy Legal Framework will keep evolving.

Turnover Eligibility and Alignment

Since the argenx Activities are EU Taxonomy non-eligible activities, they are not included in our turnover key performance indicators (KPI). We have concluded that as eligibility for the argenx Activities is nil, alignment related to turnover is also considered to be nil and totals 0%. Our net turnover KPI denominator, covering product net sales and collaboration revenue (as listed in Annex I, point 1.1.1 of Article 8 CDR), totals $1.2 billion. Non-financial undertakings related to turnover are included in the consolidated financial statements, under footnote 15, Product net sales and footnote 16, Collaboration revenue.

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering 2023