On 22 May 2025, the European Banking Authority (“EBA”) launched a public consultation on amending the EBA’s Pillar 3 disclosures framework by incorporating the Capital Requirements Regulation III requirements on ESG-related risks, equity exposures and the aggregate exposure to shadow banking entities (the “Consultation Paper”). Unsurprisingly, given the EU’s “Omnibus” package and wider “simplification” drive (which you can read more about here and here), the Consultation Paper aims to simplify the reporting process for in-scope institutions.
In particular, the Consultation Paper proposes:
- Extending the scope of institutions required to disclose ESG information to cover large non-listed institutions, small and non-complex institutions (“SNCIs”) and large subsidiaries, in addition to the already in-scope large listed institutions;
- Having a tailored approach to ESG disclosures, offering different sets of templates based on institution type. This would mean that SNCIs would only disclose essential information on ESG risks, for example;
- Maintaining the current disclosure requirements for large listed institutions, but clarifying these requirements based on feedback received to date about the Pillar 3 framework;
- Incorporating a direct cross-reference in the draft implementing technical standards (the “ITS”) for Pillar 3 disclosures, which would ensure that the relevant templates in the Pillar 3 framework will be automatically updated in line with any future changes to the EU Taxonomy Regulation;
- Incorporating updated statistical codes (NACE); and
- Introducing a phased approach for the implementation of the ITS, meaning that large listed institutions will continue to apply existing disclosure rules until the end of 2026 (excluding templates related to the Green Asset Ratio and EU Taxonomy Regulation, which are suspended until the end of 2026), and newly in-scope institutions will apply the disclosure rules from the end of 2026.
The Consultation Paper also proposes transitional provisions and supervisory flexibility, including a “no-action” letter, advising regulators not to prioritise the enforcement of specific ESG disclosure templates during the transition phase.
Next steps
Feedback can be submitted to the EBA on the Consultation Paper until 22 August 2025. The EBA will subsequently assess the feedback received, finalise its draft ITS and submit those draft ITS to the European Commission.
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