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What are High-impact climate sectors (HICS)?

Atlas Metrics recommends reading the following FAQs first:

What are NACE and NACE Codes?

 

High-impact climate sectors (HICS) are economic industries that have a significant impact on the environment and society. A company is active within a HICS when its **economic activities derive revenue directly from one of these high-impact climate sectors.

High-impact climate sectors are identified through specific NACE code classifications. The EU has recognised certain NACE codes within the overall NACE classification framework as high-impact climate sectors due to their impacts on the environment and society.

Regulatory Definitions of High-Impact Climate Sectors

According to the ESRS and the SFDR, high-impact climate sectors are industries that have significant energy consumption and greenhouse gas emissions, such as mining, manufacturing, and transportation. These high-impact climate sectors are listed in Sections A to H and Section L of the NACE Classification system.

List of HICS - Sections A to H and Section L:

  • Section A - Agriculture, Forestry, and Fishing
  • Section B - Mining and Quarrying
  • Section C - Manufacturing
  • Section D - Electricity, Gas, Steam, and Air Conditioning Supply
  • Section E - Water Supply, Sewerage, Waste Management and Remediation Activities
  • Section F - Construction
  • Section G - Wholesale and Retail Trade; Repair of Motor Vehicle and Motorcycles
  • Section H - Transportation and Storage
  • Section L - Real Estate Activities

 

 

Glossary, Definitions, and Links

ESRS - European Sustainability Reporting Standards. European Union regulatory guidelines under the Corporate Sustainability Reporting Directive (CSRD) standardising how organisations disclose their environmental, social, and governance (ESG) impacts.

HICS - High-impact climate sectors. HICS are economic industries that have a significant impact on both the environment and society.

NACE - Nomenclature of Economic Activities. NACE is a standardised framework established by the European Union to categorise economic activities across its member states.

Link - NACE Classification (Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council (18) as defined in Commission Delegated Regulation (EU) 2022/1288 (19)).

Link - NACE Rev. 2 Manual (Statistical classification of economic activities in the European Community).

SFDR - Sustainable Finance Disclosure Regulation. European Union regulatory guidelines require financial market participants to disclose sustainability-related information on environmental, social, and governance (ESG) factors in investment decisions and financial products.