ENVERIUMESG DATA MANAGEMENT
Eligibility Guide

Certifying Eligibility

Understand the general criteria to certify if an economic activity is eligible according to the Brazilian Sustainable Taxonomy.

Criteria Overview

For an economic activity to be considered eligible and alignedwith the Brazilian Sustainable Taxonomy, it must meet three fundamental criteria:

  1. Contribute substantially to one or more of the 11 defined objectives
  2. Do not significantly harm any of the other objectives (DNSH)
  3. Comply with the Minimum Safeguards

General Eligibility Criteria

i
Substantial Contribution
Substantially contribute to one or more of the objectives defined by the taxonomy.
  • The activity must promote concrete and measurable benefits
  • Positive impacts must be significant, not just marginal
  • Contribution must align with the 11 objectives of the Brazilian taxonomy
  • Specific technical criteria are defined by sector and activity
ii
Do No Significant Harm (DNSH)
Do not significantly harm any of the other taxonomy objectives.
  • The activity cannot cause material harm to other objectives
  • Assessment considers direct and indirect impacts
  • Specific DNSH criteria by Industry/Activity (CNAE)
  • Documentation and evidence are required for proof
iii
Minimum Safeguards
Comply with the Minimum Safeguards established by the taxonomy.
  • Respect for fundamental human and labor rights
  • Compliance with applicable labor and environmental legislation
  • Corporate governance and ethical practices
  • Transparency in operations and stakeholder relations

The 11 Taxonomy Objectives

To contribute substantially, the activity must promote at least one of these objectives:

Environmental and Climate Objectives
  • Climate Change Mitigation
  • Climate Change Adaptation
  • Biodiversity Protection and Restoration
  • Sustainable Use of Soil and Forests
  • Sustainable Use of Water Resources
  • Transition to Circular Economy
  • Pollution Prevention and Control
Economic and Social Objectives
  • Decent Work and Income Elevation
  • Reduction of Socioeconomic Inequalities
  • Reduction of Regional Inequalities
  • Quality of Life and Access to Services

Activity Categorization Scope

Decision flowchart to determine the alignment status of an economic activity with the Brazilian Sustainable Taxonomy.

Decision question
Eligibility criteria
Intermediate result
Aligned activity
Partial/Non-aligned activity
Is it an eligible activity?
No
Activity out of TSB scope
Yes
Meets Minimum Safeguards?
No
Activity not aligned with TSB
Yes
Is it a directly qualified activity?
Yes
Meets DNSH*?
Yes
Sustainable activity
Aligned with TSB
No
Partially aligned activity
Partially aligned with TSB
No
Contributes substantially to at least one TSB objective?
Yes
Meets DNSH*?(see above)
No
Activity not aligned with TSB

*DNSH = Do No Significant Harm (NPS em Português). Criterion verifying if the activity does not cause significant harm to other taxonomy objectives.

Detailing beyond CNAE Subclass

The Brazilian Sustainable Taxonomy uses the CNAE hierarchical structure, with an additional level of detail to specify eligible activities.

CNAE Structure with Electricity sector example
SectionDivisionGroupClassSubclassCNAE Detail
CNAE D
ELECTRICITY AND GAS
35
ELECTRICITY, GAS, AND OTHER UTILITIES
35.1
Electric power generation, transmission and distribution
35.11-5
Electric power generation
3511-5/01
Electric power generation
D1:
Hydroelectric power generation
D2:
Wind power generation
35.12-3
Electric power transmission
3512-3/00
Electric power transmission
N/A

Note: The "CNAE Detail" level (D1, D2, etc.) is specific to the Brazilian Sustainable Taxonomy and allows identifying eligible activities with greater precision than the standard CNAE structure.

Specific Criteria by CNAE Detail - Example for Activity D1

From this detailing, the TSB lists specific criteria for eligibility. Delving into the above example, for Eligible Activity D1:

D1: Hydroelectric power generation

National Classification of Economic Activities (CNAEs):

  • 35.11-5: Electric power generation
  • 42.21-9: Construction works for electricity generation and distribution and for telecommunications

Description:

Implementation, construction, modernization, expansion, repowering, and operation and maintenance of electricity generation facilities producing energy from hydraulic sources.

Examples of activities:

  • Hydroelectric plant with reservoir
  • Run-of-river plant
  • Small and micro hydroelectric power plants, for self-production, independent production, centralized or distributed production, connected or not to the grid

Substantial Contribution to Objective 1 – Climate Change Mitigation:

  1. All existing ventures are directly qualified and exempt from presenting a life cycle assessment of a product, including carbon footprint assessment, provided they comply with the current legal process of environmental licensing and obtaining grants.
  2. Hybrid systems integrating existing hydroelectric power generation with other renewable sources, such as wind power generation (D2) and solar power generation (D3), qualify, provided the technical criteria of each involved source and their contribution to climate change mitigation and adaptation are respected.

Do No Significant Harm (DNSH):

The DNSH criteria applicable to this activity are based on the adoption of complementary criteria to those of substantial contribution, aiming to ensure that its implementation does not cause adverse impacts to other TSB climate, environmental, and socio-economic objectives.

Do no significant harm (to any of the following objectives):
Climate change adaptation
  • Conduct studies on infrastructure vulnerability to extreme weather events, such as prolonged droughts or floods.
  • When possible, design reservoirs allowing volume and capacity adjustments in response to weather events.
  • Evaluate studies on changes in flow regimes.
  • Evaluate and revise operational hydraulic constraints, considering the "new" reservoir operation dynamics.
  • Conduct studies on increasing resilience to extreme weather events.
Biodiversity and ecosystem protection and restoration
  • Construct fish ladders and flow bypasses to ensure aquatic species migration, if indicated by the environmental agency within the Environmental Licensing process.
  • Conduct periodic biodiversity assessments in adjacent areas to identify and mitigate impacts.
  • Manage flora and fauna removal in case of reservoir construction.
Sustainable use of soil and conservation, management and sustainable use of forests
  • Execute forest compensation measures defined in environmental licensing, integrating land use planning with conservation strategies in zones of influence.
Sustainable use and protection of water and marine resources

Implement, in accordance with local regulations, all technically feasible and ecologically relevant mitigation measures to reduce adverse impacts on water, as well as on protected habitats and species directly dependent on water. Measures include, where relevant and depending on ecosystems present in affected water bodies:

  • Measures to ensure upstream and downstream fish migration (such as fish-friendly turbines, fish guidance structures, fully functional fish passes, measures to stop or minimize operations and discharges during migration or reproduction).
  • Measures to ensure minimum ecological flow (including mitigation of rapid and short-term flow variations or hydropeaking operations) and sediment flow.
  • Measures to protect or improve habitats. The effectiveness of these measures is monitored in the context of the authorization or license establishing conditions aimed at achieving good status or potential of the affected water body.
Transition to circular economy
  • Prioritize recycling, composting, reuse, and other sustainable treatments in solid waste management throughout the project's lifespan, including prioritizing, where technically feasible, recyclable materials for infrastructure construction.
Pollution prevention and control
  • Develop a water quality monitoring plan.
Reduction of socioeconomic inequalities, considering gender and race aspects
  • Annex A1: Criteria for not significantly harming social-economic objective 9.

References

DNSH Criteria by Sector
Consult specific criteria by CNAE
View criteria
Official Notebooks
Technical documents from the Ministry of Finance
Access notebooks