The European Banking Federation (EBF) has submitted its formal response to the European Financial Reporting Advisory Group’s (EFRAG) consultation on the revised Exposure Drafts of the European Sustainability Reporting Standards (ESRS). While welcoming the simplifications already introduced, the EBF stressed the need for further streamlining to ensure reporting requirements remain proportionate, particularly for banks, while still supporting Europe’s green transition.
In its submission, the EBF urged policymakers to make the final standards more ambitious in simplifying requirements, while safeguarding the most material data points for users of non-financial information. The federation emphasised that the framework must take account of the specific role and complexity of financial institutions.
Among the EBF’s key recommendations are:
- Flexibility on emissions targets – Banks should be able to use both intensity and absolute targets, without being forced to convert intensity targets into absolute ones, which could create “wrong incentives” in financing high-emitting sectors in transition.
- Simpler guidance on impacts – The current “gross vs net” approach to assessing positive and negative impacts is overly complex and should be reworked for greater clarity.
- Relief for missing data – Missing data allowances should apply consistently across all disclosures, including Scope 3 emissions, as banks rely heavily on client-provided data that may not always be complete or reliable.
- Fair presentation principle – While supportive in principle, the EBF called for a clear definition, aligned with ISSB, to ensure the rule reduces burdens rather than creating new ones.
- Anticipated financial effects – A phased approach is necessary, with qualitative disclosures preferable in the near term until methodologies and auditing practices mature.
- Value chain reporting – The federation urged flexibility to reflect the specificities of financial institutions, which act as intermediaries across complex and vast client value chains.
- Data point reduction – The EBF warned that a smaller number of mandatory data points does not automatically translate into less reporting effort, since information may still be required elsewhere.
The EBF reaffirmed its readiness to continue working closely with regulators and standard setters, emphasising that the ESRS must remain clear, proportionate, and operationally feasible. This, it said, is essential to ensure banks can effectively support sustainable finance, deliver transparency, and contribute to Europe’s just green transition.
