The following sections set out the steps taken in applying NACE and EU taxonomy to the TICCS industry pillar. 

TICCS to NACE:

Initially, we have reviewed and created a shortlist of relevant NACE codes that are deemed to be infrastructure activities.

We considered the principal activities and underlying assets of each TICCS code and mapped them to themes that align with the relevant NACE code following the list. In addition, we identified NACE codes that were in fact infrastructure specific but omitted from our initial mapping and added these to the mapping.

In those instances where we found no direct map of an asset TICCS subclass to a NACE code, we instead mapped it to the “closest” NACE group instead. For example, The TICCS subclass Public Parks and Gardens (IC305020) is mapped to the NACE group Botanical and zoological gardens and nature reserves activities (R91.04).

Several assumptions were made during the mapping exercise:

• Trade of electricity (NACE 35.14) is tagged to TICCS subclasses under the umbrella of IC10 Power Generation x-Renewables and IC70 Renewable power, given that their business activities involve the sale of electricity.

• Installation of industrial machinery and equipment (NACE 33.20) is mapped to TICCS subclasses that require unique, specialised machinery to operate. For instance, it is mapped to all assets in IC20 Environmental Services, including IC204010 Flood Control which involves a drainage infrastructure system to hold rainwater to prevent urban flooding.

• For Construction of residential and non-residential buildings (NACE 41.20), we follow the definition of a building in the NACE guidelines. In that respect, we only include stand-alone “buildings” here and not buildings within facilities. For example, an office building in a nuclear power plant is not mapped to this code. Greenfield projects were considered in this mapping.

• The exercise ignores Specialised construction activities (NACE 43.00) and Specialised consultancy services (NACE 71.00). In principle, these activities should be mapped to all TICCS asset subclasses, but these are excluded to allow proper analysis and comparison by market participants when using the taxonomies.

We consider as many relevant NACE codes as possible in our mapping of TICCS to NACE at the granular level, including those of construction activities, renting equipment and construction of buildings where necessary.

TICCS to EU Taxonomy:

First, we examine the list of activities relevant for each objective of the EU taxonomy which was taken from the EU Taxonomy Compass[1].^[1]

Two out of six environmental objectives of EU taxonomy are currently defined, but the EU taxonomy regulation foresees additional objectives to be defined in the future.

The EU taxonomy regulation defines the two objectives investments must achieve in order to be labelled as sustainable: Climate change mitigation and Climate change adaptation. These objectives cover broadly the same activities with some differences, as a result, which led us to tag additional items for climate change adaptation.

[1] https://ec.europa.eu/sustainable-finance-taxonomy/index.htm

Each activity defined in the EU Taxonomy will have a corresponding NACE code and thus a corresponding TICCS code.

Much like the approach we adopted in TICCS to NACE mapping, only relevant infrastructure activities are considered.

The Taxonomy Compass assigns NACE codes to activities. This code assignment is not strictly followed in our mapping exercise since we need to be as granular as possible.

During the mapping process, several assumptions were made:

The EU taxonomy activities are tagged to the infrastructure that enables them. Roads are tagged to Vehicles (i.e. taxi, bus, land transport vehicles) while Taxi operation (NACE 49.32) and Other passenger land transport n.e.c. (NACE 49.39) are mapped to Road companies (IC6050). Similarly, Ships are tagged to Ports and Aircraft to Airports. This is partly done to enable Scope 3 assessment.

• Activity 6.7 Inland passenger water transport is not tagged to Ports because these appear to be smaller docks and ferry terminals.
• Activity 7.3 Installation, maintenance, and repair of energy efficiency equipment is ignored because it is not considered essential for infrastructure.
• Activity 4.17 through 4.25, where heat/cooling is generated within other renewable projects such as solar etc., are tagged to the individual renewable technologies in TICCS and an additional NACE code D35.30 Steam and air conditioning supply is tagged to the corresponding TICCS code.