DNSH - Analysis and Audit

The DNSH principle (Do No Significant Harm) is a relatively new rule for the field of finance, both in the private and public segments, issued by the European Commission.

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The DNSH principle was established in the context of the European Taxonomy on sustainable investments, which will ensure that, from now on, every investment is obliged to respect the environment, through measures taken within its own activities, prioritizing those activities and economic sectors that have the greatest potential to achieve these goals.

What is DNSH ("Do Not Significant Harm")

The DNSH principle considers any activity that:

  • Leads to significant greenhouse gas (GHG) emissions

  • It has an increased negative impact on the climate, the activity itself or on people, nature and property

  • It is detrimental to the good status or ecological potential of water bodies, including surface water and groundwater, or the good environmental status of marine waters

  • It uses materials and resources inefficiently and significantly increases the generation, incineration or disposal of waste, or even if the disposal of the waste may cause significant and long-term damage to the environment

  • It contributes significantly to pollutant emissions to air, water or soil

  • Significantly harms the well-being and resilience of ecosystems, or harms the conservation status of habitats and species, including those protected by EU legislation

A DNSH audit therefore involves analyzing the activity and investments from the perspective of environmental protection requirements from European and national legislation and guidelines.

Who is the DNSH Audit for?

The verification of activities in the context of DNSH principles is addressed to companies that wish to access European funds, including from the National Recovery and Resilience Plan (PNRR). Carrying out a DNSH audit is a mandatory step for obtaining these financings, but also for companies that have obligations regarding Sustainable Development Reporting in the context of Directive 2022/2464 (CSRD).

Advantages for the business environment in pursuit of DNSH objectives

Following DNSH principles can bring multiple advantages to the business environment:

.01

Improving reputation and brand image

Adopting a DNSH commitment can strengthen a company's positive image in the eyes of customers, investors and the wider community. Thus, it can help increase customer trust and loyalty.
.02

Operational Efficiency

Implementing DNSH practices can lead to more efficient management of resources and optimization of operational processes, which can lead to long-term cost savings.
.03

Access to markets and partnerships

Many companies and organizations are expressing interest in partnerships and collaborations with entities that adopt sustainable practices. By adopting DNSH principles, Romanian companies could have easier access to business opportunities and partnerships.
.04

Adaptation to the requirements of the international market

As concerns related to sustainability and social responsibility become increasingly important globally, adopting DNSH standards can help Romanian companies align with international market trends and expand their presence in foreign markets.

.05

Compliance with regulations

In the context of specific European regulations promoting DNSH principles, their adoption can ensure legal compliance and reduce the risk of sanctions or fines.

How a DNSH expert from Stratos helps you

The verification of activities in the context of DNSH principles is addressed to companies that wish to access European funds, including from the National Recovery and Resilience Plan (PNRR). Carrying out a DNSH audit is a mandatory step for obtaining these financings, but also for companies that have obligations regarding Sustainable Development Reporting in the context of Directive 2022/2464 (CSRD).

Stratos helps you identify objectives that comply with DNSH principles and accompanies you in the implementation process.

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