ESG Disclosure Requirements Ruled Exempt by EBA, with Updates Made to ESG Risk Monitoring Tool
The European Banking Authority (EBA) has issued a no-action letter, temporarily suspending the enforcement of specific Environmental, Social, and Governance (ESG) Pillar 3 disclosure requirements for EU banks. This move is aimed at alleviating operational and legal challenges for banks as they await the finalization of the European Commission’s "Omnibus" initiative.
The suspension applies to certain ESG disclosure templates, including EU 6 to EU 10, and parts of Templates 1 and 4, under the Implementing Technical Standards (ITS) introduced by the EU’s CRR3 Banking Package. These templates encompass disclosures on environmental physical and transition risks, fossil fuel exposures, integration of ESG risks into business strategies, governance, and risk management.
The EBA recommends that national authorities not prioritize enforcement for these templates, as well as specific columns in Templates 1 and 4 under Commission Implementing Regulation (EU) 2024/3172. This suspension applies to both large institutions with listed securities and other institutions newly covered by Article 449a of the CRR due to the extended ESG scope.
This pause in enforcement is not a suspension of all ESG-related disclosures nor the management of ESG risks. The EBA emphasizes that it is merely delaying the full application of certain detailed ESG disclosure templates until the legal framework stabilizes and clearer rules are published, potentially by the end of 2026.
The EBA's decision covers both large, listed banks and smaller or newly in-scope institutions affected by the CRR3 disclosure extension. The authority continues to engage with EU institutions to ensure a coherent and streamlined ESG disclosure framework. Future updates to the EBA’s ESG risk dashboard will reflect this reprioritization.
The no-action letter provides banks regulatory relief from the immediate obligation to comply fully with certain Pillar 3 ESG disclosure templates while awaiting the outcome of the EU’s ongoing sustainability regulatory revisions. The latest EBA ESG risk dashboard, based on data from December 2024, shows a stable ESG risk environment for EU/EEA banks, reflecting the long-term nature of climate-related risks.
The EBA is committed to delivering a coherent and streamlined ESG disclosure framework and will continue collaborating with EU institutions and stakeholders for a smooth rollout of new rules. Future editions of the ESG risk dashboard will adjust content in line with the no-action letter’s recommendations.
Banking institutions, regardless of their size or new inclusion due to the extended ESG scope, are temporarily exempted from fully complying with certain Environmental, Social, and Governance (ESG) disclosure templates, according to the European Banking Authority (EBA). This exemption is specifically for templates related to scientific aspects such as environmental physical and transition risks, fossil fuel exposures, and integration of ESG risks into business strategies, as well as governance and risk management. However, this does not mean suspended management of ESG risks or all ESG-related disclosures.
