The European Banking Authority (EBA) has released finalized draft standards that simplify ESG disclosure requirements for large banks while extending ESG reporting obligations to smaller institutions for the first time. The revised framework introduces tiered reporting requirements based on institution size, aiming to reduce compliance burdens while maintaining transparency on environmental, social, and governance risks.
Under the new rules, large listed banks will see ESG reporting datapoints cut by 37%, while small and non-complex institutions will report significantly fewer metrics through a simplified regime. The standards also require banks to disclose exposure to fossil fuel sectors and explain how ESG risks are integrated into strategy and risk management, with the draft now set to be submitted to the European Commission for adoption.
Reference: ESG Today