FAQs on the application of ESG disclosure requirements following the issuance of the EBAs no-action letter

Q1. Which institutions are mentioned in the no-action letter of the EBA on the application of the provisions relating to disclosures on ESG risks?

In its Opinion^[1], issued in the form of a no-action letter, the European Banking Authority (EBA) provides guidance on the application of environmental, social and governance (ESG) Pillar 3 disclosure requirements under the revised Capital Requirements Regulation (CRR III)^[2], and makes recommendations to competent authorities in relation to two groups of institutions:

1. large institutions which have issued securities that are admitted to trading in a regulated market of any EU Member State;
2. all institutions other than the institutions mentioned in point 1 above that fall under the expanded scope of ESG risk disclosure requirements introduced by CRR III. This includes large non-listed institutions, other institutions, small and non-complex institutions, and large subsidiaries of EU parent institutions.

Q2. What does the EBA’s no-action letter recommend for each group of institutions?

Institutions belonging to the first group are required to disclose information related to ESG risks in accordance with Regulation (EU) 2024/3172.^[3] For these institutions, the EBA recommends in its no-action letter that competent authorities do not prioritise the enforcement of the disclosure of ESG templates 6 to 10^[4], template 1, column c^[5], and template 4, column c^[6] from Regulation (EU) 2024/3172 – all of which relate to the Green Asset Ratio (GAR) and the Taxonomy Regulation^[7] – until the amendments to the EBA disclosure implementing technical standards (ITS)^[8] are adopted and enter into force. This is because legislative developments, particularly those related to the EU taxonomy, have a direct impact on the structure and content of ESG risk-related disclosures contained in the EBA disclosure ITS.

For all other institutions falling within the expanded disclosure scope introduced by CRR III, the EBA recommends that competent authorities do not prioritise the enforcement of the disclosure of information related to ESG risks under the Pillar 3 framework until the amended EBA disclosure ITS are adopted and enter into force. This postponement is intended to avoid a disproportionate compliance burden on smaller or less complex institutions, as well as to allow for potential changes introduced by the European Commission’s Omnibus package of legislative proposals^[9].

Institutions will be required to apply the amended EBA disclosure ITS as of the date that they enter into force.

Q3. What is the ECB’s interim approach until the amended EBA disclosure ITS enter into force?

The ECB is responsible for assessing significant credit institutions’ compliance with Pillar 3 disclosure requirements. ECB intends to follow the EBA’s recommendation and does not intend to prioritise the enforcement of the above-mentioned disclosures.

Every year the ECB publishes selected Pillar 3 information for individual banks on its banking supervision website. This is includes the main solvency, leverage, liquidity coverage and net stable funding ratios, as published by significant institutions pursuant to Part Eight of the CRR, as well as a subset of Pillar 3 disclosure requirements depending on the ECB’s supervisory priorities. In 2024, ESG templates 1, 2, 4, 5, 6 and 7 were included in the scope of the exercise. In the upcoming interim period, ECB will not include templates 6 to 10, template 1, column c, or template 4, column c in the scope of this exercise, in line with the EBA’s recommendation.

Q4. What is the timeline for the application of this interim approach?

The interim approach applies for the period starting from the reference date of 30 June 2025 until the amended EBA disclosure ITS (see Q2) enters into force.

Q5. What does the EBA’s no-action letter recommend in relation to the ad hoc collection by competent authorities to the EBA of institutions’ ESG data?

The EBA’s no-action letter recommends that, in their ad hoc collection of institutions’ ESG data – launched under EBA Decision EBA/DC/498 of 6 July 2023 – competent authorities do not prioritise the enforcement of the collection of ESG templates 6 to 10, template 1, column c and template 4, column c.

Q6. What is the ECB’s interim approach in relation to the ad hoc collection of institutions’ ESG data?

The ECB is responsible for the ad hoc collection of institutions’ ESG data. For the period starting from the reference date of 30 June 2025 until the amended EBA disclosure ITS enter into force, the ECB does not intend to prioritise the enforcement of collection of ESG templates 6 to 10, template 1, column c and template 4, column c of EBA Decision EBA/DC/498 of 6 July 2023, in line with the EBA’s recommendation.