1. A Principle Born from Crisis

Among the novelties of the European Union (EU)’s pandemic response, the “Do No Significant Harm” (DNSH) principle stands out as a novel form of environmental conditionality in the EU legal order. Originally conceived as a technical benchmark for sustainable finance under the EU Taxonomy Regulation, the principle has evolved into a binding requirement for public expenditure within the Recovery and Resilience Facility (RRF).

My recent article for the Review of European Administrative Law analyses the DNSH principle’s multi-level application under the RRF, where it operates as a mandatory condition that both constrains administrative discretion and structures coordination between the EU and Member States. This transformation seems to reflect a broader shift in how environmental objectives are implemented through EU fiscal governance.

As a funding condition, the DNSH generates a series of cascading legal and administrative effects within domestic systems, making its operationalisation a particularly rich case study at the intersection of European administrative and environmental law. While its core function is to ensure that recovery measures do not significantly harm key environmental objectives, its implementation reveals deeper implications for the evolving relationship between EU environmental conditionality and national administrative practice.

2. From Sustainable Finance to Public Spending

The DNSH principle first appeared in the EU Taxonomy framework, the Union’s classification system for environmentally sustainable economic activities. Under Article 17 of Regulation 2020/852 (Taxonomy Regulation), an economic activity is deemed to “do significant harm” if it undermines any of six environmental objectives: climate mitigation, climate adaptation, sustainable use of water and marine resources, circular economy, pollution prevention and control, and restoration of biodiversity and ecosystems.

Initially, the principle served a classificatory function—a technical benchmark enabling financial market participants to determine whether an economic activity could be labelled as environmentally sustainable. With the adoption of the RRF Regulation in 2021, this principle’s function changed profoundly—from classifying private investment to conditioning access to EU public funding. Article 18(4)(d) of the RRF Regulation requires Member States to demonstrate, for every reform and investment, how it complies with DNSH. Article 5(2) elevates it to a horizontal principle that governs the entire Facility. Consequently, no measure can obtain RRF support if it risks causing significant environmental harm as defined by the Taxonomy framework.

To support the implementation of the DNSH, the European Commission issued its Technical Guidance on the Application of DNSH linking the assessment to existing EU environmental legislation and providing practical examples for Member States.

Under the RRF framework, the DNSH evolved from an aspirational sustainability criterion into an administrative requirement that must be satisfied ex ante, verified ex post, and continuously upheld throughout the life cycle of each funded measure.

3. Environmental Conditionality as Governance Innovation

The inclusion of the DNSH principle marks a new generation of environmental conditionality in EU funding law. Whereas earlier conditionalities—such as those in cohesion policy—linked access to funds to macroeconomic or structural reforms, DNSH attaches environmental criteria to every measure financed under the RRF, whether in digitalisation, social policy, or infrastructure.

This approach exemplifies what scholars describe as ex ante governance: the Commission steers national policymaking before implementation by defining substantive conditions in advance. By approving or rejecting National Recovery and Resilience Plans (NRRPs) according to—amongst other conditions—DNSH compliance, the Commission exercised a form of anticipatory control that significantly shapes domestic policy choices. Environmental protection thus is not a mere external constraint but instead becomes a precondition for fiscal solidarity, aligning economic recovery with the Union’s Green Deal objectives. The RRF’s reliance on planning and programming instruments to embed these standards mirrors a EU broader trend in environmental governance. This approach enables the EU to set common objectives while allowing Member States to adapt them to national contexts—fostering coordination with flexibility.

4. Cascading Responsibilities: From Brussels to Local Administrations

The operationalisation of the DNSH principle has generated a cascade of legal and administrative responsibilities across the multiple governance levels involved in the RRF governance. When submitting their NRRPs, Member States were required to include detailed DNSH self-assessments for each proposed measure. The Commission, in turn, evaluated these assessments for conformity with the RRF Regulation and with the DNSH principle as a funding condition.

This multilevel framework extends well beyond the approval stage. Once plans are adopted, national ministries, regional authorities, and even individual contracting authorities must ensure that all projects, procurements, and reforms comply with DNSH requirements throughout their life cycle—from design and tendering to implementation and reporting. Public authorities shall embed DNSH criteria in tender documentation, request environmental self-assessments from contractors, and maintain evidence to substantiate ongoing compliance.

These obligations have a structural impact on domestic administrative law and practice. Under the RRF, national administrations effectively operate as implementers of an EU-driven environmental conditionality. They must interpret and apply the principle within their procedural frameworks, translating broadly framed standards into binding administrative acts and procurement rules. In doing so, they contribute to the gradual Europeanisation of domestic administrative practice, as financial conditionality increasingly operates as a mechanism for integrating environmental considerations into administrative decision-making.

5. Legal Uncertainty and the Burden of Proof

The RRF notion of “significant harm” remains inherently open-textured. Although the Commission’s guidance allows for simplified assessments where impact is minimal, it leaves national authorities a wide margin of discretion in determining whether a given measure may significantly impact any of the six environmental objectives identified in the Taxonomy Regulation. This discretion, while offering flexibility, also gives rise to legal uncertainty. Implementing public administrations must assess, often without clear benchmarks, whether a project’s effects on biodiversity are “significant”, or whether its long-term carbon footprint remains acceptable. As the European Court of Auditors has observed, such ambiguities contribute to administrative delays and uneven implementation across Member States.

Moreover, DNSH compliance often overlaps with existing EU and domestic environmental legislation. Many RRF projects already fall within the scope of instruments such as the Environmental Impact Assessment Directive. However, the Commission has clarified that compliance with these regimes does not automatically ensure DNSH conformity, since Article 17 of the Taxonomy Regulation encompasses additional and evolving objectives. While existing environmental assessments may provide supporting evidence, implementing authorities are still required to conduct a distinct DNSH appraisal addressing each relevant environmental dimension.

This fragmented landscape poses challenges for consistency and administrative coherence. Yet, the comprehensive nature of the DNSH principle—covering six environmental objectives simultaneously—also gives it an important integrative potential. Unlike traditional environmental assessment tools that address specific domains or sectors, DNSH provides a unified evaluative framework capable of reconciling competing environmental priorities, such as climate transition and biodiversity protection. If effectively implemented, this holistic approach could strengthen coherence across EU environmental action, transforming DNSH from a procedural safeguard into a driver of substantive alignment between economic governance and environmental integrity.

6. Public Procurement: Where DNSH Meets Everyday Administration

The DNSH principle finds one of its most tangible expressions in the field of public procurement, through which a substantial share of RRF funds is implemented. Traditionally, EU procurement law has centered on procedural guarantees—how to buy rather than what to buy. In recent years, the tendency of EU law has been to impact more and more on the sphere of what to buy, with growing EU legislation directly impacting national choices in that regard. The DNSH principle is part of this shift: environmental performance becomes a substantive element in defining the object of contracts, already at the planning stage, in close coordination between national authorities and the Commission.

Contracting authorities responsible for RRF-funded measures must now integrate DNSH considerations throughout the entire procurement cycle. This entails embedding environmental criteria in technical specifications, using award criteria to favour bidders with stronger DNSH compliance, and incorporating contractual clauses that ensure ongoing monitoring and provide for sanctions in cases of breach.

Because the RRF Regulation applies directly within domestic legal orders, these obligations extend even to contracts below the thresholds set by the EU Public Procurement Directives. In practice, DNSH operates as a horizontal environmental clause permeating national procurement procurements related to RRF spending and interacting with existing environmental rules.

7. The Operationalisation of the DNSH in Italy: Translating EU Conditionality into Administrative Law and Practice

Italy provides an illustrative case study for the application of the DNSH principle. As the largest RRF beneficiary, the country had to operationalise DNSH across thousands of measures at the different RRF governance levels. To guide implementation, the Ministry of Economy and Finance issued an Operational Guide for Compliance with the DNSH Principle, which—though not legally binding—provides detailed datasheets and checklists for different intervention types, referencing both EU and domestic environmental legislation.

Italian administrative courts have begun to clarify the legal contours of DNSH obligations in public procurement. In Karsan Europe v Comune di Bari (Administrative Regional Tribunal of Puglia Region, 2024), the exclusion of a bidder for failing to submit a DNSH assessment was upheld, affirming that compliance with the RRF Regulation is mandatory for all contracting authorities. In other cases, such as Farri & Co. v Comune di Figline e Incisa Valdarno (Administrative Regional Tribunal of Toscana Region, 2022), the court addressed the substance of DNSH assessments. In this case, it held that land consumption does not automatically constitute “significant harm” unless it destroys ecosystems or breaches specific criteria set in the Commission’s delegated acts. By relying on these technical screening criteria, Italian courts are interpreting the substantive content of DNSH as applied in domestic law.

The Italian example underscores the central role of European administrative law in guiding domestic enforcement of EU environmental principles. It also highlights the potential of the DNSH principle in driving a more coherent and enforceable framework for environmental protection, particularly when tied to conditionalities in large-scale funding mechanisms like the RRF. By requiring public administrations to justify, document and integrate environmental considerations into their activities, the DNSH principle—despite its current limitations—may serve as a lever for enhancing stronger environmental standards across different levels of governance.

8. Beyond the RRF: Is the DNSH Principle Here to Stay?

Within the EU legal order, the DNSH principle is no longer confined to the RRF. It is progressively being enshrined across a variety of Union instruments—albeit with differing legal effects and scopes. References to the DNSH now appear in the European Regional Development Fund, the InvestEU Programme, and the Social Climate Fund. Beyond the realm of financial instruments, the Commission has also integrated DNSH considerations into its Better Regulation framework and in the Multiannual Financial Framework, albeit in a largely programmatic or policy-oriented capacity.

This proliferation of the DNSH principle suggests its gradual consolidation as a structural element of EU environmental governance. Yet, its legal nature varies significantly across these contexts. The DNSH principle is evolving within EU legislation, carrying a potential to secure higher coherence between economic activities of different kinds and EU environmental ambitions. The question remains whether the mandatory application of the principle, as prescribed under the RRF in the form of a funding conditionality, could be expected to expand to other areas of EU law, or if it will evolve into a more general principle of EU environmental law, comparable to Treaty-based principles such as the precaution principle and the integration principle, thus able to shape the interpretation and application of various policies across the EU.

9. The Normative Significance of DNSH for EU environmental law

The DNSH principle embodies a broader process of juridification of environmental integration within the EU legal order. While Article 11 TFEU already requires environmental protection to be integrated into the definition and implementation of all Union policies, the DNSH gives this broad mandate concrete legal expression. It operationalises this broad policy objective into specific and verifiable administrative obligations, thereby converting high-scale environmental commitments into a concrete legal and procedural standard applicable across diverse sectors of EU governance.

Distinct from the more sectoral and fragmented nature of much EU environmental legislation, DNSH encompasses six environmental objectives simultaneously. This holistic scope promotes greater environmental coherence across the Union, ensuring that the pursuit of one goal, such as the energy transition, does not come at the expense of others, such as biodiversity restoration. In this sense, DNSH aspires to embed environmental protection in a balanced and systemic way throughout EU policy and funding practice.

By linking access to EU financial support with compliance with environmental criteria, the DNSH creates a direct connection between spending power and environmental legality. This development strengthens the preventive and coordinative dimensions of EU environmental governance, ensuring that environmental objectives are considered not only ex post but from the moment a policy or investment is conceived.

However, the principle’s reliance on soft-law guidance and its implementation through diverse administrative frameworks raise questions of coherence and consistency across Member States. The real test for DNSH lies less in its legal formulation than in its administrative translation—in how national authorities, contracting entities, and courts apply it in practice.

Whether DNSH will ultimately evolve into a general principle of EU environmental law remains uncertain. Yet its normative impact is already visible: across the Union, public authorities are applying what might be described as a new “green legality test”, integrating environmental accountability into the core of administrative action. In this respect, the DNSH marks a significant step towards consolidating environmental integrity as a condition of EU governance.

Posted by Leila Kentache