DNSH? How to measure?
- EcoVision
- 3 days ago
- 3 min read
In ESG and sustainability, DNSH stands for "Do No Significant Harm."
It means that while pursuing a sustainability objective (such as reducing carbon emissions), an activity must not significantly harm other environmental or social goals.
For example, a renewable energy project should not cause major harm to biodiversity or local communities.
This principle is commonly used in EU Taxonomy and global sustainability reporting frameworks.
Examples of significant harm
In opposite, examples of significant harm under the DNSH (Do No Significant Harm) principle include actions that negatively impact environmental or social objectives.
Some common examples are:
• Environmental harm
– Large-scale deforestation
– Water pollution from industrial waste
– Significant greenhouse gas emissions
– Destruction of biodiversity or habitats
– Excessive water use that depletes local resources
• Social harm
– Human rights violations
– Unsafe or exploitative labor conditions
– Forced displacement of communities
– Violations of worker health and safety
• Governance-related harm
– Corruption or bribery
– Lack of transparency in reporting
– Noncompliance with environmental or labor regulations
If an activity creates these kinds of impacts, it is considered to have caused “significant harm” and would violate the DNSH requirement.
Six environmental objectives in EU Taxonomy
The Do No Significant Harm (DNSH) requirement in the EU Taxonomy ensures that when an economic activity contributes to one environmental objective, it must not significantly harm the other objectives.
The EU Taxonomy defines six environmental objectives:
Climate change mitigation
Climate change adaptation
Sustainable use and protection of water and marine resources
Transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems
Under the DNSH rule:
• An activity can count as “environmentally sustainable” only if it substantially contributes to one objective and does not significantly harm any of the remaining five.
• Companies must perform a detailed assessment using technical screening criteria set out in EU regulations.
• This assessment covers environmental, social, and governance risks, such as pollution, ecosystem impacts, waste generation, and compliance with minimum social safeguards.
Example:
A solar power project supports climate mitigation, but it must also ensure it does not harm biodiversity or create excessive pollution during manufacturing.
If it does, it fails DNSH.
In short, DNSH ensures sustainability efforts are holistic, preventing companies from solving one environmental issue while creating another.
How to measure DNSH?
Measuring DNSH (Do No Significant Harm) involves assessing whether an economic activity avoids causing major negative impacts on environmental and social objectives.
In the EU Taxonomy, this is done through a structured, evidence‑based process.
Here are the key ways to measure it:
• Use EU Taxonomy Technical Screening Criteria
Each activity has specific DNSH criteria (e.g., limits on pollution, waste management rules, biodiversity protections).
Companies check compliance with these detailed regulatory thresholds.
• Conduct Environmental Impact Assessments (EIA)
EIAs quantify impacts on air, water, biodiversity, noise, and waste—helping determine whether harm is “significant.”
• Life Cycle Assessments (LCA)
Measures environmental impact across the product or project lifecycle (raw materials, production, use, disposal). If harm is seen at any stage, DNSH may fail.
• Check compliance with environmental laws
Breaches in waste management, emissions, chemical use, or water regulations are considered significant harm.
• Screen for minimum social safeguards
Companies must comply with guidelines like the OECD Guidelines, UN Guiding Principles, and labor rights standards to avoid social harm.
• Risk and Materiality Assessments
Identify where the activity might harm other objectives—for example, soil contamination, ecosystem disturbance, or hazardous waste generation.
• Use environmental performance metrics
– GHG emissions
– Water consumption
– Pollution levels
– Waste recovery rates
– Biodiversity impact indicators
• Third‑party audits and certifications
Independent auditors verify that no significant harm is being caused.
• Continuous monitoring and reporting
Companies track impacts regularly and disclose them under CSRD or SFDR reporting rules.
In essence, DNSH is measured through regulatory criteria, scientific assessments, compliance checks, and ongoing monitoring—ensuring sustainability efforts do not create new environmental or social damage.
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