The concept of avoiding significant harm - the principle of 'do no significant harm’ (DNSH) - is expressed across both:

 

  • the SFDR (Article 2(17)) and

 

 

Under the latter it is among the preconditions qualifying environmentally sustainable economic activities.

 

SFDR refers to DNSH in its definition of ‘sustainable investment’.

 

DNSH principle will be specified through the European Commissions' delegated acts.

 

Article 2a of SFDR grants the European Supervisory Authorities (the ESAs) the power to develop draft regulatory technical standards to specify the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’.

 

Further, the power is delegated to the European Commission to supplement this SFDR by adopting the relevant regulatory technical standards. 

Definitions of significant harm are established for each environmental objective.

 

For example, as regards climate change mitigation, an activity is deemed to cause significant harm where it leads to significant greenhouse gas emissions, on a lifecycle basis.