EBA Proposes Simplified EU Taxonomy Disclosures for Banks & investment firms

The European Banking Authority (EBA) has recommended targeted changes to the European Union's Taxonomy disclosure framework to reduce reporting complexity for banks and investment firms while preserving meaningful sustainability information. Published on 29 October 2026, the technical advice proposes removing two key performance indicators (KPIs), simplifying group-level reporting and revising Green Asset Ratio (GAR) disclosure templates. The recommendations were submitted to the European Commission as part of its ongoing review of the Taxonomy Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation.

The proposals respond to the Commission's March 2026 request for technical advice from the European Supervisory Authorities (ESAs), following broader sustainability reporting simplification measures introduced through the Omnibus Delegated Act. The EBA's recommendations focus on five areas intended to improve the relevance, consistency and usability of environmental disclosures by financial institutions. The proposals remain advisory and will require further consideration before the Commission adopts any changes to existing requirements.

 

EBA Recommends Removing Two Taxonomy Reporting Indicators

 

A central recommendation is to remove the Fees and Commissions KPI and Trading Book KPI from Taxonomy disclosure requirements. These indicators measure the relationship between certain banking activities and environmentally sustainable economic activities under the EU Taxonomy. The EBA's assessment identifies opportunities to reduce reporting requirements for these indicators while maintaining information useful for evaluating financial institutions' environmental activities.

The authority also recommends simplifying the 'other services' KPI applicable to investment firms, including services related to capital markets. The proposed revisions would narrow and clarify the information required from investment firms, reducing the complexity of calculating and reporting Taxonomy-related metrics. These changes form part of an effort to make reporting obligations more proportionate to the activities being assessed.

 

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Green Asset Ratio Templates Targeted for Simplification

 

The EBA has proposed adjustments to Green Asset Ratio disclosure templates used by credit institutions. The GAR is a key sustainability reporting indicator that measures the proportion of covered banking assets associated with economic activities aligned with the EU Taxonomy. It shows the extent to which banks' relevant financing activities support environmentally sustainable economic activities under the regulation.

Rather than recommending removing the GAR, the EBA proposes simplifying and clarifying the templates used to report it. The authority also recommends greater consistency across disclosure templates for banks' asset management activities, asset managers and investment firms. The proposed adjustments are intended to improve the presentation and usability of sustainability information while reducing unnecessary reporting complexity.

 

Group Reporting and Green Bond Provisions Face Changes

 

The technical advice recommends simplifying Taxonomy disclosures for financial groups by allowing consolidated reporting to rely primarily on the parent undertaking's KPIs. Where relevant and subject to defined conditions, these disclosures could be supplemented by KPIs covering material secondary activities without requiring further aggregation. This approach would reduce reporting complexity across financial groups operating multiple business lines while retaining information on significant activities.

The EBA also recommends aligning certain grandfathering provisions with the EU Green Bond Regulation, limited to bonds issued under that framework. Grandfathering provisions determine how investments are treated when applicable Taxonomy criteria or reporting conditions change over time. In addition, the authority advises against incorporating the operational expenditure (OpEx) KPI disclosed by non-financial companies into financial institutions' Taxonomy KPI calculations, to avoid an additional layer of reporting complexity.

 

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European Supervisory Authorities Coordinate Disclosure Reforms

 

The EBA developed its technical advice in cooperation with the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). The recommendations incorporate stakeholder feedback from a public consultation and address issues affecting financial institutions' ability to calculate, consolidate, and disclose sustainability indicators consistently.

The proposals also support the EBA's broader initiative, "Simplifying to strengthen: building a more efficient EU prudential and supervisory framework." This program seeks to identify reporting obligations that can be streamlined while preserving information needed by regulators, investors and other market participants. The Taxonomy recommendations therefore form part of wider efforts to improve regulatory efficiency without abandoning the underlying objectives of sustainable finance reporting.

 

European Commission Review Will Determine Final Requirements

 

The EBA's advice will inform the European Commission's forthcoming review of the Taxonomy Disclosures Delegated Act. If adopted, the recommendations could change the reporting requirements for credit institutions and investment firms, particularly on selected KPIs, consolidated disclosures, and Green Asset Ratio templates.

For financial institutions, the proposed revisions could reduce the operational burden of compiling environmental disclosures while maintaining greater consistency in reported information. However, the recommendations do not immediately amend existing obligations, and their practical impact will depend on the Commission's decisions and the final regulatory provisions introduced.

 

Source: European Banking Authority (EBA)