What is DNSH?
DNSH – Do No Significant Harm is a European principle designed to ensure that economic activities and investments contributing to sustainability objectives do not simultaneously cause significant harm to other environmental objectives.
The principle was formally established under the EU Taxonomy Regulation (EU) 2020/852, which defines six environmental objectives. Under the EU Taxonomy, an economic activity can be considered environmentally sustainable if it makes a substantial contribution to at least one environmental objective and does not significantly harm the others.
The DNSH principle became particularly relevant with NextGenerationEU and the Italian National Recovery and Resilience Plan (PNRR), where compliance with DNSH is a key requirement for investments and reforms financed under the Recovery and Resilience Facility.
Regulatory References
- Regulation (EU) 2020/852 – EU Taxonomy Regulation, in particular Article 17 – Significant Harm to Environmental Objectives.
- Regulation (EU) 2021/241, establishing the Recovery and Resilience Facility (RRF) and introducing the DNSH principle within the framework of the Italian National Recovery and Resilience Plan (PNRR).
- European Commission Delegated Regulations, which define the technical screening criteria for determining when an economic activity substantially contributes to environmental objectives without causing significant harm to the other objectives.
- MEF-RGS Circular No. 32 of 30 December 2021 – Operational Guide for Compliance with the Principle of Do No Significant Harm to the Environment (DNSH), applicable to PNRR interventions in Italy.
DNSH Operational Guide – MEF/RGS
Guida operativa DNSH – MEF/RGS
Circular Srl supports companies and public administrations in the assessment and verification of the Do No Significant Harm (DNSH) principle, analysing the compatibility of projects, activities and investments with the six environmental objectives of the European Union.
The service includes the identification of applicable requirements, verification of the available evidence, identification of potential critical issues and related improvement measures, as well as the preparation of the documentation required for funding calls, financial instruments, investments and reporting processes.
Where appropriate, the assessment is supported by quantitative tools such as Life Cycle Assessment (LCA), Carbon Footprint and circularity assessments, which make it possible to provide measurable data and evidence to support the verification of environmental requirements and the criteria established by the EU Taxonomy.
Circular has further developed and consolidated this expertise through its participation in the European project CONFESS – Certification of Clean Energy SMEs, in which it was a partner together with RWTH Aachen University, Climate & Company, Czech Technical University in Prague (CVUT), and the International Sustainable Finance Centre (ISFC).
As part of the project, CleanLeap was developed as a support tool designed to help SMEs systematically assess their alignment with the EU Taxonomy and verify the availability and adequacy of the evidence required to demonstrate compliance with sustainability criteria.