Do No Significant Harm Principle in the Green Taxonomy
The Do No Significant Harm Principle (DNSH) is one of the cornerstones of the EU’s sustainable finance framework. Several regulations rely on the DNSH principle, and its use is most prevalent in the green taxonomy through specific DNSH criteria. In the context of the green taxonomy, the DNSH criteria are part of the assessment if a certain economic activity is aligned with the taxonomy or not.
The general idea of the principle is that contribution to one of the taxonomy goals should not be achieved at the expense of any of the other taxonomy goals. This would mean that contributing to climate change mitigation via the manufacturing of hydrogen should also keep an eye on DNSH criteria regarding the sustainable use and protection of water and marine resources or the protection and restoration of biodiversity and ecosystems.
To describe the DNSH principle in more detail, a short overview of the green taxonomy is useful: In general, the taxonomy is a long list of economic activities which can be deemed “green”, if they contribute to one of the six goals, do not violate the DNSH criteria and keep certain minimum safeguards (e.g. human rights, worker rights, etc). The DNSH criteria can be interpreted as the minimum requirements an activity has to comply with regarding the other five environmental objectives.
One specific example for the real estate sector, e.g., if a company is active in the construction of new buildings and fulfils the substantial contribution criteria  and also does not violate the DNSH criteria , the turnover, operational expenditure or capital expenditure of the activity can then be classified as aligned with the taxonomy.
The example should illustrate that even when e.g. low energy housing is build, which contributes to the fight against climate change, the change to a more circular economy and resource management should be included in the planning of the project in order to be aligned with the green taxonomy and be labelled green.
 Part of the Substantial contribution criteria for the economic activity of “construction of new buildings” for the EU Taxonomy goal of “contribution to climate mitigation”: The Primary Energy Demand (PED), defining the energy performance of the building resulting from the construction, is at least 10 % lower than the threshold set for the nearly zero-energy building (NZEB)
 Part of DNSH criteria for the economic activity of “construction of new buildings” for the EU Taxonomy goal of “contribution to climate mitigation” for the DNSH criteria Circular Economy: At least 70 % (by weight) of the non-hazardous construction and demolition waste generated on the construction site is prepared for reuse, recycling and other material recovery…
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