EBA Proposes Three-Tier ESG Supervisory Reporting Framework to Reduce Bank Disclosure Burden

The European Banking Authority published a proposed overhaul of its ESG supervisory reporting framework, introducing a proportionality-based three-tier structure and removing several EU Taxonomy-related reporting templates for banks. The public consultation on the measures remains open until July 10, 2026, with proposed changes set to apply from September 2027.

Under the proposed three-tier framework, large institutions with more than EUR 30 billion in total assets will follow a framework largely aligned with Pillar 3 ESG disclosure requirements, minus taxonomy-related templates, and with two additional supervisory-specific templates covering corporate environmental exposures and environmental risks beyond climate. Smaller non-complex institutions and other non-listed banks will face a significantly reduced obligation of one annual template covering climate physical and transition risks in simplified format, with GHG financed emissions reporting removed. The framework for intermediate-sized institutions falls between these two levels.

The EBA simplification follows the EU Omnibus I initiative that reduced sustainability reporting and regulatory obligations for companies under the CSRD, CSDDD, Taxonomy Regulation, and CBAM. The 2024 EU Banking Package extended ESG risk disclosures from large institutions to all institutions, including requirements on environmental physical and transition risks, social and governance risks, and fossil fuel sector exposures. The new supervisory reporting proposals create a parallel simplification at the supervisory level, complementing earlier changes to banks' Pillar 3 external disclosure requirements.

Incoming EBA Chair Francois-Louis Michaud described the package as an unprecedented simplification that would make supervisory reporting considerably simpler, smarter, and more proportionate while preserving the quality and relevance of information supervisors need. The removal of BTAR taxonomy alignment reporting from supervisory templates, while retaining it in Pillar 3 requirements, reflects a calibrated approach to reducing internal reporting burden without removing public investor-facing disclosures. For Indian banks with EU operations or subsidiaries, the changes to EBA supervisory frameworks affect compliance obligations in European jurisdictions.

Key figure — EUR 30 billion total assets threshold defining large institutions subject to the full supervisory ESG reporting tier